Nonresidential building construction spending increased 1.7% in December after inching up 0.1% in November. For 2011, spending fell 4.0% from 2010.
“For lease” private projects spending slipped 0.1% following a 1.2% increase in November, which was revised up from a previously reported decline of 0.3%. For the year, for lease spending decreased 3.4%. Hotel construction dropped 2.3% after rising 2.1% in November. For the year, the measure plummeted 24.8%. Office construction was essentially unchanged, down 0.1% in December, following an increase of 1.6% the previous month. For the year, it fell 8.4%.
Construction spending for institutional projects was down 0.2%, after rising 0.5% in November. For 2011, spending dropped 4.6%.
Manufacturing construction spending surged up 13.4% in December after falling 4.0% in November. Despite the strong finish and increasing in nine of the previous eleven months, manufacturing construction spending fell 3.3% in 2011.
Notwithstanding concerns about Europe and oil prices acting as a drag on the U.S. expansion and thus nonresidential construction spending, the forecast is for spending totals to strengthen throughout 2012 and 2013 as the economy continues to grow and companies see the need to expand to meet rising demand. Low long-term interest rates continue to be a positive for those contemplating proceeding with a project. Increasing domestic demand and greater exports to Asia and South America are expected to more than offset the likely slowdown in exports to Europe.
The forecast is for nonresidential construction spending to increase 5.4% in 2012 and to strengthen in 2013, growing 8.2%.
U.S. Nonresidential Construction |
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| Monthly Figures* (latest actual values) |
3-Month Moving Average |
Actual | Forecast | |||||||||
| Oct-11 | Nov-11 | Dec-11 | Oct-11 | Nov-11 | Dec-11 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Lodging | 8.447 | 8.623 | 8.428 | 8.547 | 8.576 | 8.499 | 35.806 | 25.499 | 11.329 | 8.515 | 8.862 | 9.738 |
| Month-over-Month % Change | -2.4% | 2.1% | -2.3% | 0.2% | 0.3% | -0.9% | ||||||
| Year-over-year % Change (NSA) | -15.7% | -14.6% | -15.3% | 24.7% | -28.8% | -55.6% | -24.8% | 4.1% | 9.9% | |||
| Office | 34.315 | 34.870 | 34.852 | 34.504 | 34.717 | 34.679 | 68.563 | 51.908 | 37.573 | 34.415 | 36.568 | 40.345 |
| -1.9% | 1.6% | -0.1% | 0.1% | 0.6% | -0.1% | |||||||
| -5.8% | -1.5% | -1.9% | 5.1% | -24.3% | -27.6% | -8.4% | 6.3% | 10.3% | ||||
| Commercial (mainly retail) | 43.506 | 43.796 | 43.929 | 44.815 | 44.080 | 43.744 | 86.212 | 54.069 | 40.522 | 43.488 | 45.122 | 48.729 |
| -3.2% | 0.7% | 0.3% | -1.8% | -1.6% | -0.8% | |||||||
| 11.0% | 12.2% | 13.2% | -3.9% | -37.3% | -25.1% | 7.3% | 3.8% | 8.0% | ||||
| Health Care | 38.615 | 39.207 | 39.723 | 40.087 | 39.624 | 39.182 | 46.902 | 44.845 | 39.879 | 39.694 | 41.432 | 45.159 |
| -5.9% | 1.5% | 1.3% | -2.4% | -1.2% | -1.1% | |||||||
| -4.8% | -4.7% | -2.3% | 7.2% | -4.4% | -11.1% | -0.5% | 4.4% | 9.0% | ||||
| Education | 86.100 | 86.102 | 85.637 | 86.350 | 86.406 | 85.946 | 104.890 | 103.202 | 88.227 | 84.692 | 86.770 | 91.500 |
| -1.1% | 0.0% | -0.5% | 0.7% | 0.1% | -0.5% | |||||||
| 2.5% | 3.1% | 2.9% | 8.4% | -1.6% | -14.5% | -4.0% | 2.5% | 5.5% | ||||
| Religious | 4.042 | 3.875 | 3.972 | 4.140 | 4.020 | 3.963 | 7.225 | 6.192 | 5.208 | 4.152 | 4.121 | 4.417 |
| -2.4% | -4.1% | 2.5% | 0.3% | -2.9% | -1.4% | |||||||
| -18.3% | -23.2% | -18.5% | -4.2% | -14.3% | -15.9% | -20.3% | -0.7% | 7.2% | ||||
| Public Safety | 9.667 | 10.124 | 9.929 | 9.911 | 9.873 | 9.907 | 13.083 | 13.787 | 11.118 | 9.895 | 10.072 | 10.270 |
| -1.6% | 4.7% | -1.9% | 0.2% | -0.4% | 0.3% | |||||||
| -6.4% | -0.6% | 2.4% | 28.3% | 5.4% | -19.4% | -11.0% | 1.8% | 2.0% | ||||
| Amusement/Recreation | 15.852 | 15.810 | 15.576 | 15.856 | 15.935 | 15.746 | 21.829 | 19.404 | 16.959 | 15.527 | 16.401 | 17.536 |
| -0.3% | -1.5% | 0.8% | 0.5% | -1.2% | ||||||||
| -6.7% | -7.8% | -4.1% | 2.9% | -11.1% | -12.6% | -8.4% | 5.6% | 6.9% | ||||
| Manufacturing | 40.860 | 39.239 | 44.479 | 40.555 | 40.221 | 41.526 | 53.234 | 56.836 | 38.106 | 36.868 | 42.763 | 48.455 |
| 0.7% | -4.0% | 13.4% | 4.1% | -0.8% | 3.2% | |||||||
| 19.3% | 20.4% | 41.8% | 31.0% | 6.8% | -33.0% | -3.2% | 16.0% | 13.3% | ||||
| Total** | 281.404 | 281.646 | 286.525 | 284.764 | 283.453 | 283.192 | 437.744 | 375.742 | 288.921 | 277.246 | 292.110 | 316.148 |
| -2.1% | 0.1% | 1.7% | 0.2% | -0.5% | -0.1% | |||||||
| 1.7% | 2.8% | 6.2% | 8.4% | -14.2% | -23.1% | -4.0% | 5.4% | 8.2% | ||||
* Monthly figures are seasonally adjusted at annual rates (SAAR figures). |
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Read more forecasts from Reed Construction Data:
Construction Spending Ends the Year on an Up Note
Heavy Engineering (Non-Building) Construction Ends the Year Strongly
New Residential Construction Spending Rises in December
