ABC Reports Decline in Non-residential Construction Spending in September
Among the sixteen nonresidential subcategories, thirteen were down on a monthly basis. Private nonresidential spending declined 1.5% in September, while public nonresidential construction spending was down 1.7%.
Nonresidential construction spending is down 4.4% from the same time last year, with lodging-related spending down more than 15% and office-related spending down nearly 7%.
“The pace of decline in nonresidential construction spending is accelerating,” said ABC Chief Economist Anirban Basu. “This is precisely what had been predicted. Coming into the [pandemic] crisis, the economy was rolling, helping to lift construction backlog amid elevated developer confidence, according to ABC’s Construction Backlog Indicator and Construction Confidence Index. The crisis shattered that equilibrium, producing distressed commercial real estate fundamentals, diminished confidence, postponed and cancelled projects, the embrace of remote work, tighter credit conditions and damaged state and local government finances.
“The hope is that policymakers in Washington, D.C., will soon see fit to deliver on a long-awaited infrastructure financing and spending program,” said Basu. “Not only would that accelerate the broader economy’s economic recovery, a well-executed infrastructure package would make American workers more productive, unleash new private development opportunities and allow America to better compete in the global marketplace. The longer America has to wait for such a package, however, the more vulnerable its citizens will be to further economic dislocations.”
It is possible the delay in any additional funding support could continue until the presidential election is decided. Anticipated vote recounts will very likely extend the decision for as long as one month.