Dive Brief:
- Nonresidential construction spending ticked down 0.3% in April to a seasonally adjusted annual rate of $1.2 trillion, according to Associated Builders and Contractors’ analysis of U.S. Census Bureau data.
- After a revision flipped March’s 0.2% increase into a decline, April marked the second consecutive month of reduced construction spending in 2024, said Anirban Basu, ABC chief economist.
- Despite these declines, the country’s manufacturing boom continues to support overall spending levels, keeping nonresidential spending up 11.5% over the past 12 months, according to the report. The manufacturing segment gained 0.9% in April and has jumped more than 17% over the past 12 months.
Dive Insight:
“An unprecedented increase in manufacturing construction spending has pushed overall nonresidential activity 31.9% higher over the past two years,” said Basu. “Ongoing investment in industrial facilities as well as significant infrastructure-related outlays will keep nonresidential spending elevated despite the current expectation that interest rates will stay higher for longer.”
Nonresidential construction spending remains strong compared to a year ago, according to Census Bureau data. Over the past 12 months, private nonresidential spending jumped 8.3%, while public nonresidential spending soared 16.7%.
But private sector nonresidential spending continued to post mixed results month to month, said Ken Simonson, chief economist for the Associated General Contractors of America. The category declined 0.3% in April, after a 0.2% drop in March.
For example, commercial construction fell 1.1% in April and remains virtually unchanged from a year ago. The sector’s overall growth is largely due to the largest private segment, manufacturing construction, gaining 0.9% in April and more than 17% over the past 12 months.
“Overall spending slipped despite upturns in manufacturing and power construction,” said Simonson. “Most public segments continued a seesaw pattern, with decreases in April following gains in other recent months.”
Ten of the 16 nonresidential categories posted a monthly decrease in April, according to the Census Bureau. Following manufacturing, spending on transportation and water supply both jumped 0.5% in April. On the other hand, construction spending on lodging and healthcare projects decreased 1.6% and 2.4%, respectively, according to the data.