Nonresidential construction spending topped the $700-billion mark on a seasonally adjusted annualized basis in January for the first time since March 2009, according to a recent analysis of U.S. Census Bureau data released by the Associated Builders and Contractors.

Nonresidential construction spending expanded 2.0% on a monthly basis and 12.3% on a yearly basis, totaling $701.9 billion. The Census Bureau revised

December’s estimate upward from $681.2 billion to $684.5 billion, although it downgraded November’s figure from $683.7 to $680.5 million. Private nonresidential construction spending increased by 1% for the month, while its public counterpart expanded by 4.6%.

“After several months of relatively weak nonresidential construction spending data, this data release was most welcome,” said ABC Chief Economist Anirban Basu. “While January is a difficult month to interpret, and one that should not be overly emphasized, the fact of the matter is that the year-over-year performance in spending is consistent with a host of industry indicators. For many months, the average contractor has been reporting decent backlog. Measures of industry confidence have remained stable even in the face of adverse news coming from various parts of the world,” Basu said.

“While the nonresidential construction spending recovery appears to remain in place, the industry’s overall outlook remains murky,” he added. “The global economy remains weak, and domestic corporate profitability has been slipping. The U.S. economic recovery continues to be under diversified, with consumers continuing to lead the way.

“If corporate profitability continues to struggle, given falling exports and a general lack of confidence among CEOs, the pace of employment growth will slow over the course of 2016. That will presumably affect consumer spending, which is already being hampered by rising health care costs. That, in turn, could jeopardize the ongoing economic recovery, now on its way to completing its seventh year,” Basu said.

Spending increased in January on a monthly basis in 10 of 16 nonresidential construction sectors:

  • Spending in the highway and street category expanded 14.6% from December 2015 and is 33.9 higher than in January 2015.
  • Sewage and waste disposal-related spending expanded 4% for the month and 1.4% from the same time last year.
  • Spending in the amusement and recreation category climbed 0.7% on a monthly basis and 16.9% on a year-over-year basis.
  • Conservation and development-related spending is 10% higher on a monthly basis and 1.6% higher on a yearly basis.
  • Lodging-related spending is up 6.3% for the month and up 34.8% on a year-ago basis.
  • Spending in the religious category grew 4.2% for the month and 0.2% from January 2015.
  • Manufacturing-related spending expanded 4.2% on a monthly basis and up 11.3% on a yearly basis.
  • Spending in the power category expanded 2.9% from December 2015 and is 8.1% higher than in January 2015.
  • Water supply-related spending expanded 2% on a monthly basis but fell 7.9% on a yearly basis.
  • Spending in the office category grew 0.2% from December 2015 and is up 19.6% from January 2015.

Spending in six of the nonresidential construction subsectors fell in January on a monthly basis:


  • Commercial-related construction spending fell 4.3% for the month but grew 0.8% on a year-over-year basis.
  • Educational-related construction spending fell 1.1% on a monthly basis but expanded 12.1% on a yearly basis.
  • Transportation-related spending fell 2.5% month-over-month, but expanded 0.6% year-over-year.
  • Health care-related spending fell 0.1% month-over-month but is up 1.8% year-over-year.
  • Public safety-related spending is down 1.5% for the month and 3.2% from the same time one year ago.
  • Communication-related spending fell by 4.2% month-over-month but expanded 27.2% year-over-year.