National non-residential construction spending increased by 0.3 percent in January, according to the Associated Builders and Contractors (ABC) analysis of data published by the US Census Bureau, which translates to a 968.7 billion dollar spend for the month.
Across the board, spending was down monthly in seven of the 16 non-residential subcategories. Private non-residential spending was up 0.9 percent, while public non-residential construction spending was down 0.6 percent in January.
ABC Chief Economist Anirban Basu, says that on a year-over-year basis, spending in the non-residential sector continues to outpace inflation. “That’s largely attributable to strength in the industrial segment; manufacturing-related construction spending surged 5.9 percent in January and is up by an astonishing 53.6 percent since January 2022.
With the CHIPS and Science Act directing 280 billion dollars into semiconductor manufacturing and an ongoing desire to reshore manufacturing capacity, the segment should continue to thrive,” he shares. “Excluding manufacturing-related construction, non-residential spending actually declined in January,” says Anirban. “A combination of headwinds, including severely elevated borrowing costs, ongoing labor shortages and still-high input costs are likely to blame. Despite these factors and a gloomy economic outlook, a majority of contractors continue to expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index.”