According to a Sept. 1 report by the U.S. Census Bureau non-residential construction spending expanded 0.5 percent in July and is up 12.7 percent over the same time last year. That’s the strongest year-over-year growth since April 2008. Non-residential construction spending totaled $696.1 billion in July, which is the best reading since March 2009. Additionally, June’s estimate was revised up by 0.9 percent from $686.9 billion to $692.8 billion.
“A number of forces are at work and are conspiring to help push nonresidential construction spending higher,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Perhaps most importantly, job growth remains robust, helping to drive down office and other vacancy rates, prompting more construction starts.” Basu noted that recreational and business travel spending had also been trending higher, which was supporting new construction in the lodging and amusement categories.
Public sector spending is also having an impact, said Basu.”State and local government capital outlays also appear to be recovering and were surprisingly strong during this year’s second quarter. In addition, materials prices have been in general decline, which has helped justify moving forward with construction projects.”
