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Nonresidential Building Construction Spending Takes a Step Back in November

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Nonresidential building construction spending dropped 1.2% at a seasonally adjusted (SA) rate in November after rising 0.5% in October. But not seasonally adjusted (NSA) year-to-date spending was 6.0% higher than the same period in 2011.

Nonresidential building construction spending dropped 1.2% at a seasonally adjusted (SA) rate in November after rising 0.5% in October. But not seasonally adjusted (NSA) year-to-date spending was 6.0% higher than the same period in 2011.

“For lease” private projects spending were down 1.1% (SA) in November after bounding up 1.7% in October. Year-to-date for lease spending increased 8.4% over 2011. Lodging construction spending fell 1.7% in November after soaring 5.0% higher in October. Office construction spending took a bigger hit in November, down 2.2%, after increasing 0.7% in October. Retail construction spending slipped 0.2% following a healthy 1.6% advance in October. On a year-to-date basis through November, lodging spending increased 25.5%, office construction spending increased 4.0%, and retail construction spending increased 8.5% from 2011.

Construction spending for institutional projects in November sank 1.2% after inching up 0.3% in October. On a year-to-date
basis, spending was up 1.1% from 2011. All the categories in this group were down in November, but all were higher than in 2011 on a year-to-date basis except for religious construction spending (-8.4%) and amusement and recreation construction spending (-0.3%).

Manufacturing construction spending fell for the second month in a row, down 1.0% in November and down 1.3% in October. Despite these recent declines, year-to-date spending was up 19.2% from 2011.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

  Monthly Figures (1)
(latest actual values)
3-Month Moving Average Year-to-Date (NSA)
  Sep-12 Oct-12 Nov-12 Sep-12 Oct-12 Nov-12 Jan-11 to
Sep-11
Jan-12 to
Nov-12
For Lease 94.7 96.3 95.2 94.9 95.8 95.4 80.0 86.7
  Month-over-Month
  % Change
-1.7% 1.7% -1.1% 0.3% 0.9% -0.4%    
  Year-over-year
  % Change (NSA)
5.0% 9.8% 6.5%       -2.8% 8.4%
     Lodging 11.1 11.6 11.4 11.4 11.4 11.4 8.0 10.1
  -4.3% 5.0% -1.7% -0.9% 0.2% -0.4%    
  23.5% 30.0% 21.8%       -25.3% 25.5%
     Office 36.2 36.5 35.7 36.5 36.7 36.2 31.9 33.2
  -2.8% 0.7% -2.2% 0.3% 0.6% -1.4%    
  -0.3% 7.4% 3.3%       -9.0% 4.0%
     Commercial
     (mainly retail)
47.4 48.2 48.1 47.1 47.7 47.9 40.1 43.5
  -0.2% 1.6% -0.2% 0.6% 1.3% 0.4%    
  5.9% 7.7% 5.8%       9.7% 8.5%
Institutional 154.0 154.5 152.6 156.2 155.4 153.7 142.6 144.2
  -2.4% 0.3% -1.2% -0.8% -0.5% -1.1%    
  -3.6% -0.2% -1.2%       -4.6% 1.1%
     Health Care 39.2 40.1 39.9 40.9 40.6 39.7 36.4 37.3
  -8.0% 2.3% -0.5% -1.5% -0.7% -2.2%    
  -3.5% 3.2% -1.1%       0.8% 2.5%
     Education 84.5 84.1 83.8 85.3 84.6 84.1 78.1 79.1
  -1.0% -0.5% -0.3% -1.0% -0.7% -0.6%    
  -3.7% -1.8% -1.3%       -5.2% 1.2%
     Religious 3.7 3.7 3.5 3.8 3.8 3.7 3.9 3.6
  -2.9% 0.7% -6.0% -1.2% -1.6% -2.7%    
  -11.1% -6.4% -11.2%       -20.2% -8.4%
     Public Safety 9.9 10.0 9.8 10.0 10.0 9.9 9.4 9.4
  -1.9% 1.4% -2.6% -0.8% 0.1% -1.1%    
  -4.8% -0.2% -7.6%       -9.7% 0.8%
     Amusement/
     Recreation
16.7 16.6 15.6 16.2 16.4 16.3 14.9 14.8
  4.2% -0.7% -5.7% 1.9% 1.3% -0.8%    
  2.8% 5.3% -4.3%       -5.2% -0.3%
Manufacturing 49.1 48.5 48.0 48.2 48.5 48.5 37.0 44.1
  2.3% -1.3% -1.0% -0.1% 0.6% 0.0%    
  4.0% 6.1% 3.5%       -1.5% 19.2%
Total (2) 297.8 299.3 295.8 299.3 299.7 297.6 259.6 275.1
  -1.4% 0.5% -1.2% -0.3% 0.1% -0.7%    
  0.4% 4.1% 1.4%       -3.6% 6.0%

(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures).
(2) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Calculations: Reed Construction Data

The Forecast
Nonresidential construction spending is estimated to increase 5.3% in 2012, and is forecasted to rise 3.5% in 2013 and to rise 8.4% in 2014.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

  Actual Forecast
  2009 2010 2011 2012 2013 2014
For Lease 131.5 88.9 87.1 94.2 100.3 108.5
   Year-over-year % Change -31.0% -32.4% -2.1% 8.1% 6.5% 8.2%
     Lodging 25.5 11.6 8.9 11.1 12.3 13.6
-28.8% -54.4% -23.7% 24.6% 11.6% 10.3%
     Office 51.9 37.9 34.6 36.0 38.0 41.0
  -24.3% -27.1% -8.5% 3.8% 5.6% 8.1%
     Commercial (mainly retail) 54.1 39.5 43.6 47.1 50.0 53.8
-37.3% -27.0% 10.4% 8.1% 6.0% 7.8%
Institutional 187.4 161.1 154.7 155.8 157.0 167.4
  -3.4% -14.0% -4.0% 0.7% 0.7% 6.7%
     Health Care 44.8 39.3 39.7 40.6 41.8 45.4
-4.4% -12.3% 0.9% 2.3% 2.9% 8.7%
     Education 103.2 88.4 84.3 85.0 85.0 90.1
  -1.6% -14.3% -4.6% 0.9% 0.0% 6.0%
     Religious 6.2 5.3 4.2 3.9 3.6 3.8
-14.3% -14.6% -20.1% -8.8% -5.4% 4.9%
     Public Safety 13.8 11.2 10.2 10.2 9.9 10.3
5.4% -19.1% -8.2% -0.1% -3.1% 3.6%
     Amusement/Recreation 19.4 16.9 16.2 16.1 16.6 17.8
-11.1% -12.7% -4.5% -0.7% 3.1% 7.3%
Manufacturing 56.8 40.4 41.4 48.2 51.3 58.5
  6.8% -29.0% 2.6% 16.5% 6.5% 14.0%
Total (1) 375.7 290.4 283.1 298.2 308.6 334.4
-14.2% -22.7% -2.5% 5.3% 3.5% 8.4%

(1) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

by Bernie Markstein

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