National nonresidential construction spending increased by 0.7% in March, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $997.1 billion for the month.
Spending increased on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending rose 1.0%, while public nonresidential construction spending increased 0.2% in March.
“Nonresidential construction spending increased for the 10th time in the past 11 months,” said ABC Chief Economist Anirban Basu. “As has been the case for the past several months, though, the expansion in nonresidential investment is attributable to manufacturing. Were it not for a 4.6% increase in manufacturing-related spending, the nonresidential category would have been flat in March. Because this data is not adjusted for inflation, real nonresidential construction spending excluding manufacturing actually contracted in March.
“Contractors remain optimistic about their sales and profit margins over the next six months, according to ABC’s Construction Confidence Index,” said Basu. “Given the surprising resilience of construction activity in the face of ongoing interest rate increases and pervasive fears of recession, this confidence has proved justified. Spending has increased over the past year in every nonresidential subsector except for the power category, and multifamily construction is up 23.0% over the past year. The only construction category that is meaningfully affected by interest rate increases is single-family construction; spending is down 22.9% since March 2022.”