Mixed patterns of spending within nonresidential and residential construction categories appear to be indicating a shift in the market.
Remaining strong overall, total construction spending increased by 0.6% in October.
Construction spending, not adjusted for inflation, totaled $2.027 trillion at a seasonally adjusted annual rate in October. Both residential and nonresidential spending rose overall but with mixed results by segment.
“It is apparent that the construction market overall remains healthy,” said Ken Simonson, AGC’s chief economist. “A rotation is occurring among nonresidential segments as manufacturing construction expands while commercial construction slumps and highway and street spending stagnates.”
Analysis of federal spending data by the Associated General Contractors of America and Associated Builders and Contractors showed that nonresidential construction spending increased by only 0.1% for the month.
ABC Chief Economist Anirban Basu noted that it was the 17th consecutive month that nonresidential spending increased. Spending is up 20% over the past year.
“As has been the case, more than 45% of that year-over-year increase is due to surging construction activity in the manufacturing sector, though infrastructure-related categories like highway and street and sewage and waste disposal have also outperformed,” Basu said.
