U.S. Census Bureau
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Nonresidential Construction Spending Slipped in May

July 6, 2023
New monthly data from Census Bureau sees first overall decline in a year, but contractor confidence remains strong, says ABC.

PRESS RELEASE 

WASHINGTON, July 3—National nonresidential construction spending decreased 0.2% in May, according to data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.06 trillion.

Spending declined on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending fell 0.3%, while public nonresidential construction spending increased 0.1% in May.

“Nonresidential construction spending declined in May, ending a streak of 11 consecutive monthly increases,” said Anirban Basu, chief economist for Associated Builders and Contractors (ABC). “While spending is up more than 17% over that span, manufacturing-related construction has accounted for the majority of that increase. Excluding the manufacturing segment, nonresidential construction spending is barely outpacing inflation, up just 6% over the past year."

Still, contractors remain "relatively upbeat," according to ABC’s Construction Confidence Index, added Basu. "And ongoing strength in manufacturing and publicly financed segments justifies that confidence. Unfortunately, conditions may prove challenging in other segments over the next few quarters. Interest rates remain elevated and are likely to rise at least once more over the second half of 2023, exacerbating already tight credit conditions and ultimately limiting construction activity.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

##########Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 22,000 members. Founded on the merit shop philosophy, ABC and its 68 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.   

Contact: Donna Reichle, ABC | (202) 595-1782 | [email protected]