Things are looking up in the construction market for institutional and commercial facilities.
The Associated Builders and Contractors (ABC) announced that nonresidential construction increased in June and is up significantly over the last year, according to analysis of data published by the U.S. Census Bureau.
ABC reports that construction spending increased 0.1 percent in June but more notably, is up 18 percent over the past 12 months.
In institutional and commercial markets over the last 12 months, ABC reports that:
While the year-long changes are positive, ABC warns that the slower growth between May and June does carry some warning signs.
“Nonresidential construction spending growth downshifted over the past two months,” says ABC Chief Economist Anirban Basu. “While stakeholders can expect ongoing spending growth in public nonresidential construction segments as more Infrastructure Investment and Jobs Act monies flow into the economy, private developer-driven activity appears to be drying up in the context of higher costs of capital and tighter credit conditions.
“Among other things, these dynamics will translate into larger spreads in performance among contractors. While those that focus on public work stand to remain busy for years to come, those who specialize in meeting the needs of developers of office buildings, hotels and shopping centers are likely to struggle to support backlog going forward. The good news is that there remain private construction segments associated with rosier prospects, including manufacturing, data centers and health care.”
Dave Lubach is executive editor of the facilities market.
