Nonresidential Construction Spending in March Gives 'False Sense' of What's Ahead
As the U.S. experiences this drastic economic downturn from COVID-19, Associated Builders and Contractors (ABC) revealed only a slight dip in nonresidential construction spending in March for a total of nearly $803 billion. Despite falling 0.1% in March, nonresidential construction spending increased 2% over the prior year
According to ABC, 12 of the 16 nonresidential subcategories saw minimal spending in March, with conservation and development, religious, lodging, power, and amusement and recreation among those that spent the least. ABC Chief Economist Anirban Basu said COVID-19 "impacted only a portion of March;" however, the same could not be said for April.
"Many general contractors are in the midst of discussions with developers and other consumers of construction services regarding potential project postponements and cancellations," Basu said in the report. "While the health of public finances held up in March, they collapsed in April as governors, mayors, county executives and others began to observe large gaps in budgets. … Furthermore, there have been anecdotal reports of construction projects shutting down temporarily due to lingering concerns about the need for aggressive social distancing and associated worker availability challenges."
March's data was more of "a false sense," Basu noted, which will become clearer with April and May's results.
—Andrew Michaels, editorial associate