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Associated Builders and Contractors (ABC) reports that total nonresidential construction spending fell for the third month in a row, declining 0.2 percent in March to a seasonally adjusted annual rate of $556.85 billion, according to the May 1 report by the U.S. Commerce Department. However, total nonresidential construction spending is up 5.7 percent from one year ago, ABC says.
Private nonresidential construction spending increased 0.7 percent for the month and is up 15.2 percent year over year. In contrast, public nonresidential construction fell 1.1 percent in March and is down 2.8 percent compared to the same time last year, according to a May 1 ABC report.
ABC Chief Economist Anirban Basu says that while overall nonresidential construction spending dipped in March, the decline in spending was not as severe as reported during the prior two months.
“The past few months generally have been associated with negative news regarding the performance of the U.S. nonresidential construction sector,” Basu says in a construction spending report. However, although the latest data on construction spending was “mixed,” it represents”an improvement over recent data releases.
“State and local government fiscal circumstances remain challenging,” Basu says. “The deceleration in government spending appears to have impacted nonresidential construction spending, as public nonresidential construction spending fell 1.1 percent on a monthly basis, including declines in the public safety, educational and water supply sectors.
“The most positive aspect of today’s [May 2] release was that private construction spending expanded 0.7 percent for the month, with gains registered in lodging, office and the communication sectors,” Basu continues in an ABC report. “Based on a host of leading indicators, private nonresidential construction should continue to rebound during the months ahead, with the presumption being that 2012 will remain a year of economic expansion in America.”