WASHINGTON (Sept. 3, 2024) — National nonresidential construction spending decreased 0.2% in July, according to an Associated Builders and Contractors (ABC) analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.21 trillion.
Spending was down on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.4%, while public nonresidential construction spending was up 0.2% in July.
“Nonresidential construction spending declined for the second consecutive month in July but remains just 0.4% below the all-time high established in May,” said ABC Chief Economist Anirban Basu.
“While Hurricane Beryl, which interrupted construction activity along the Gulf Coast in early July, contributed to the month’s weak construction spending data, the cumulative effect of high interest rates likely bears more blame,” said Basu. “This is particularly true for nonresidential spending in the private sector, which fell 0.4% for the month and is up just 4.5% over the past year.
“Less than half of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, a clear indication that the industry is eagerly awaiting lower interest rates,” said Basu. “Fortunately, it’s all but certain that the Federal Reserve will begin lowering rates at its September meeting. The remaining question is whether it will be a 25- or 50-basis point cut.”
