WASHINGTON, Aug. 1—National nonresidential construction spending increased 0.1% in June, according to an Associated Builders and Contractors (ABC) analysis of data published today by the U.S. Census Bureau. Spending is up 18% over the past 12 months. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.07 trillion in June.
Spending increased on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending was virtually unchanged, while public nonresidential construction spending rose 0.3% in June.
“Nonresidential construction spending growth downshifted over the past two months,” said ABC Chief Economist Anirban Basu. “While stakeholders can expect ongoing spending growth in public nonresidential construction segments as more Infrastructure Investment and Jobs Act monies flow into the economy, private developer-driven activity appears to be drying up in the context of higher costs of capital and tighter credit conditions.
“Among other things, these dynamics will translate into larger spreads in performance among contractors,” said Basu. “While those that focus on public work stand to remain busy for years to come, those who specialize in meeting the needs of developers of office buildings, hotels and shopping centers are likely to struggle to support backlog going forward. The good news is that there remain private construction segments associated with rosier prospects, including manufacturing, data centers and health care.”
Meanwhile, Job Openings Declined
The construction industry had 374,000 job openings on the last day of June, according to an ABC analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings declined by 5,000 last month and are down 9,000 from the same time last year.
“Some will focus on the fact that construction job openings declined in June,” said Basu. “But the real story is that, despite massive interest rate increases and tighter credit conditions facing developers and others that purchase construction services, the number of unfilled jobs remains so elevated by historical standards. With a plurality of contractors indicating that they intend to increase staffing levels over the next six months, according to ABC’s Construction Confidence Index, many will continue to report that their leading challenge is the retention and recruitment of highly trained construction craftspeople."
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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.