Public Construction 'One of the Strongest Elements of the US Economy,' ABC Says
Despite a dip in year-over-year (YOY) September nonresidential construction spending, Associated Builders and Contractors (ABC) economists said public construction remains strong, particularly in water supply, sewage and waste disposal. Contractors might have expressed concerns over the nearly 1% decline in YOY spending; however, nonresidential spending rose 0.5% in September, with spending totaling $775.6 billion.
According to ABC's Nov. 1 report, public nonresidential construction spending was September's savior, increasing 1.5% and 6.6% month over month (MoM) and YOY, respectively. Private nonresidential spending, on the other hand, held back overall numbers, decreasing 0.3% MoM and 5.7% YOY.
"Construction spending contracted in a number of private segments, including in the commercial and lodging categories," ABC Chief Economist Anirban Basu said in the press release. "While it would be easy to attribute this to a slowing economy and/or growing concerns regarding the saturation of available space in certain private segments, there are also large-scale economic transformations playing a role."
For example, Basu said commercial construction spending is down nearly 19%, which he attributed to the battle between brick-and-mortar stores and online platforms. Fortunately, he added, "public construction remains one of the strongest elements of the U.S. economy."
—Andrew Michaels, editorial associate