Nonresidential construction spending decreased 0.4% from September to October and is up 3.9% compared with October 2023, according to Associated Builders and Contractors.
For public construction, spending decreased 0.5% for the month and is up 4.5% year to date. Private nonresidential spending fell 0.3% from September to October but is up 3.5% year to date. Spending was down for the month in 11 of the 16 nonresidential subcategories.
“Total construction spending rose sharply in October, but that was entirely due to a sharp increase in residential activity,” said ABC Chief Economist Anirban Basu. “Nonresidential construction spending contracted for the month, and the declines were widespread, with spending down in 11 of the 16 subsectors. The 3.9% increase in nonresidential spending over the past 12 months is the smallest since December 2021.”
Basu said recent severe weather affected October’s construction spending data.
“Some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton,” Basu said. “The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%.
“The effects of these storms on construction spending dynamics should largely dissipate by the end of the year,” Basu continued. “Given that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, there’s reason to expect nonresidential construction spending to rebound in the coming months.”
