Nonresidential construction spending fell 0.7% from November 2021 to December 2021 and is up 3.9% compared with December 2020, according to www.abc.org.
For public construction, spending decreased 1.6% for the month and is down 2.8% year-to-date. Private nonresidential spending was unchanged from November 2021 to December 2021 and is up 9.1% year-to-date.
Associated Builders and Contractors Chief Economist Anirban Basu said the decline for nonresidential spending in December 2021 despite rising labor costs and elevated materials prices is not encouraging regarding near-term profitability.
“A few segments continue to create a disproportionate share of contractor opportunities,” Basu said. “Among those are the commercial segment, which includes construction of fulfillment centers and manufacturing, a segment in which construction spending has expanded more than 30% during the past year. Residential construction also continues to be a hot spot in an environment characterized by scant inventory of unsold homes and rapidly rising rents, and the strength of multifamily construction is arguably one of the most surprising aspects of the economic recovery. Overall, contractors remain confident about the next six months, according to ABC’s Construction Confidence Index.
“Public construction was responsible for much of the weakness in December,” Basu continued. “The expectation among many is that, as infrastructure monies begin to flow, the second half of the year will be better than the first. It is possible that infrastructure dollars will not begin to forcefully affect the marketplace until 2023. Time will tell.”
