Tag Archive for 'commercial construction'

Dodge Momentum Index Stumbles in July

The Dodge Momentum Index fell in July, dropping 3.3% to 135.0 (2000=100) from its revised June reading of 139.6. The Momentum Index is a monthly measure of the first (or initial) report for  in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The move lower in July was due to a 6.6% decline in the institutional component of the Momentum Index, while the commercial component fell 1.1%. This month continues a recent trend of volatility in the Momentum Index where a string of gains is interrupted by a step backwards in planning intentions. Despite the decline from June to July, the Momentum Index is 6.9% higher than one year ago, which suggests further moderate gains in construction activity throughout the year. The commercial component of the Momentum Index is 8.0% higher than last year, while the Institutional component is 5.3% higher.

In July, nine projects entered planning each with a value of $100 million or more. For the institutional building sector, the leading projects were the $200 million Kaiser Permanente Medical Center in Woodbridge VA and the $200 million phase 2B of the Thompson Education Center in Rocky Hill NY. The leading commercial building projects were a $177 million Amazon fulfillment center in North Randall OH and the $170 million Pala Casino and Resort in Pala CA.

nonresidential building projects About Dodge Data & Analytics: Dodge Data & Analytics is North America’s leading provider of analytics and software-based workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities and execute on those opportunities for enhanced business performance. Whether it’s on a local, regional or national level, Dodge makes the hidden obvious, empowering its clients to better understand their markets, uncover key relationships, size growth opportunities, and pursue those opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its 100-year-old legacy of continuous innovation to help the industry meet the building challenges of the future.  To learn more, visit www.construction.com.

ABC Reports: Construction Activity Increases as Backlog Edges Higher

Untitled-2Associated Builders and Contractors’ (ABC) Construction Backlog Indicator (CBI) expanded by 1 percent to 8.5 months during the 2nd quarter of 2015. Backlog declined 3 percent during the 1st quarter, which was punctuated by harsh winter weather and the lingering effects of the West Coast ports slowdown. CBI stands roughly where it did a year ago, indicative of an ongoing recovery in the nation’s nonresidential construction industry.

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“The nation’s nonresidential construction industry is now one of America’s leading engines of growth,” said ABC Chief Economist Anirban Basu. “The broader U.S. economic recovery is now in its 74th month, but remains under-diversified, led primarily by a combination of consumer spending growth as well as residential and nonresidential construction recovery. Were the overall economy in better shape, the performance of nonresidential construction would not be as closely watched. The economic recovery remains fragile despite a solid GDP growth figure for the second quarter, and must at some point negotiate an interest-rate tightening cycle. Recent stock market volatility has served to remind all stakeholders how delicate the economic recovery continues to be.

“Though CBI expanded during the second quarter, performance continues to be uneven,” Basu said.  “A surge in heavy-industrial investment in the Middle States, including in the auto sector, and technology-led growth in the West were responsible for the bulk of second-quarter momentum. Backlog actually slipped in the infrastructure category, which remains hamstrung by uncertainties lingering around the Highway Trust Fund. Backlog was not statistically significantly different in the South between the first and second quarters.

“The national outlook continues to be positive,” said Basu. “The most consistently upbeat information regarding U.S. economic performance continues to emerge from the labor market. The nation added more than 2.9 million jobs between July 2014 and July 2015, enough to help drive down office and other commercial vacancy rates in many major markets despite ongoing construction.

“Also consider the tendency for commercial construction to follow residential construction. To the extent that remains true, the recent uptick in residential starts should translate into more commercial starts going forward. All of this should set the stage for further rebounds in CBI during the quarters to come, even in the absence of a long-term policy regarding infrastructure investment in the U.S.”

For additional analysis click here.

Regional Highlights

  • The West experienced a significant expansion in backlog, rising 1.2 months following the resolution of the West Coast port slowdown, however backlog in the region remains nearly 2.5 months below its year-ago levels, the largest drop of any region.
  • Backlog in the South has essentially returned to where it was two years ago, in part because of a slowdown in energy-related investment. The implication is that the average contractor remains busy, but boom-like conditions no longer prevail in energy-intensive communities.
  • Despite this, backlog in the South continue to hold the longest average construction backlog.
  • Backlog slipped for a second consecutive quarter in the Northeast, but remains above levels registered during the second half of 2013.

 

Year-Over-Year CBI Map of Regions and Backlog Months
Second Quarter 2014 v. Second Quarter 2015Untitled-3

See Charts and Graphs

Highlights by Company Size

  • On a quarterly basis, backlog rose or remained flat across all firm sizes.
  • Average construction backlog is higher or roughly the same as year-ago levels for firms of all size categories with the exception of a half-month drop in backlog among firms generating $100 million or more in annual revenues.
  • TThe largest firms, however, continue to have the lengthiest average backlog at 10.7 months.

See Charts and Graphs

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To read more about the latest CBI, click  here

ABC Reports: Nonresidential Construction Spending Dips in January

CEU2“Interpreting January construction statistics is always tricky because the seasonal adjustments can never precisely reflect the impact of any given winter or weather system”—ABC Chief Economist Anirban Basu.

Construction spending January 2015Nonresidential construction spending fell 2 percent in January, which is the largest setback to spending since January 2014, according to the March 2 release from the U.S. Census Bureau. However, at $614.1 billion on a seasonally adjusted, annualized basis, nonresidential construction spending still is 4.8 percent higher than one year ago. In addition, the spending estimate for December 2014 was revised downward from $627.1 billion to $627 billion and November’s figure was revised from $624.8 billion to $621.9 billion.

“Interpreting January construction statistics is always tricky because the seasonal adjustments can never precisely reflect the impact of any given winter or weather system,” said Associated Builders and Contractors Chief Economist Anirban Basu. “New England, among other places, was hit heavily by snow in January and this could explain the monthly decline in nonresidential construction spending.

“Additionally, nonresidential construction spending enjoyed positive momentum through the end of 2014 and, until January, had registered spending growth in five of the previous six months,” Basu said. “It is also possible that the West Coast port slowdown impacted construction volumes, including by reducing material availability.”

Three of 16 nonresidential construction subsectors posted increases in spending in January on a monthly basis.

  • Communication construction spending gained 0.7 percent for the month, but is down 1.5 percent for the year.
  • Highway- and street-related construction spending grew 0.2 percent in January and is up 8.7 percent compared to the same time last year.
  • Manufacturing-related spending expanded by 4 percent in January and is up 22.5 percent for the year.

Spending in 13 nonresidential construction subsectors declined in January.

  • Health care-related construction spending fell 2.3 percent for the month and is down 2.5 percent for the year.
  • Education-related construction spending fell 3.6 percent for the month and 0.4 percent on a year-over-year basis.
  • Spending in the water supply category dropped 7.5 percent from December, but is 3.3 percent higher than at the same time last year.
  • Construction spending in the transportation category fell 1.7 percent on a monthly basis, but has expanded 8.9 percent on an annual basis.
  • Public safety-related construction spending declined 6.7 percent on a monthly basis and is down 14.5 percent on a year-over-year basis.
  • Commercial construction spending decreased 5.7 percent in January, but is up 14 percent on a year-over-year basis.
  • Religious spending fell 11.4 percent for the month and is down 12.4 percent compared to the same time last year.
  • Lodging construction spending is down 4.4 percent on a monthly basis, but is up 18.2 percent on a year-over-year basis.
  • Sewage and waste disposal-related construction spending shed 7.5 percent for the month, but has grown 16 percent on a 12-month basis.
  • Power-related construction spending fell 1.1 percent for the month and is 13.2 percent lower than at the same time one year ago.
  • Conservation and development-related construction spending fell 5.1 percent for the month but is up 25.6 percent on a yearly basis.
  • Office-related construction spending declined 1.7 percent in January but is up 13.7 percent from the same time one year ago.
  • Amusement and recreation-related construction spending fell 3.2 percent on a monthly basis but is up 19.3 percent from the same time last year.
  • Sewage and waste disposal-related construction spending fell 2 percent for the month, but has grown 10.5 percent on a 12-month basis.

To view the previous spending report, click here

Nonresidential Construction Spending Inches Higher

CEU2“The October data suggest nonresidential construction spending could regain a certain degree of momentum during the months ahead, though the long-anticipated acceleration in spending is unlikely to occur until after the first quarter of 2014.” —ABC Chief Economist Anirban Basu.

Spending_12 2Nonresidential construction spending increased 1.6 percent on a monthly basis in October after declining 1.3 percent in September, according to the Dec. 2 release by the U.S. Census Bureau. (This release contained two months of data because of the federal government shutdown.) On a year-over-year basis, nonresidential construction spending is down 0.7 percent through October. Spending totaled $575.563 billion for the month on a seasonally adjusted, annualized basis.

“As expected, construction spending was hindered by a combination of elevated uncertainty and delayed procurement resulting from the government shutdown,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The October data suggest nonresidential construction spending could regain a certain degree of momentum during the months ahead, though the long-anticipated acceleration in spending is unlikely to occur until after the first quarter of 2014.”

Thirteen of 16 nonresidential construction subsectors posted increases in spending in October.

Public safety-related construction spending grew 5.6 percent, but has declined 1.2 percent on a year-over-year basis.

Amusement and recreation-related spending was up 1.8 percent on a monthly basis, but is 1 percent lower than the same time last year.

Conservation and development spending was up 6.7 percent for the month, but is down 7.2 percent for the year.

Lodging spending grew by 1.2 percent on a monthly basis and is up 17.5 percent on a year-over-year basis.

Religious spending grew 2.2 percent for the month, but is down 12.6 percent compared to the same time last year.

Education-related construction spending expanded 8.1 percent for the month, but is down 12.6 percent on a year-over-year basis.

Commercial construction spending increased 2.8 percent in October and is up 4.4 percent on a year-over-year basis.

Water supply spending edged up 1.1 percent for the month and is 14.3 percent higher than the same time last year.

Health care-related construction spending was up 1.8 percent for the month but is down 0.6 percent for the year.

Spending in the following three nonresidential construction subsectors was down in October.

Sewage and waste disposal-related construction spending declined 2.6 percent for the month, but has grown 4.5 percent on an annual basis.

Construction spending in the power category declined 3.7 percent on a monthly basis and is down 15.1 percent for the year.

Communication-related construction spending fell 8.2 percent for the month and is down 16.1 percent on a yearly basis.

To view the previous Spending report, click here

ABC Reports: Nonresidential Construction Spending Down 0.4 Percent In September

The forecast is for subdued construction in the months ahead, with more rapid recovery expected late next year.” —ABC Chief Economist Anirban Basu.

Summary

Despite a flurry of activity in residential construction spending, nonresidential construction spending decreased 0.4 percent in September, with outlays falling to a seasonally adjusted annual rate of $559.4 billion, according to the Nov. 1 construction spending report by the U.S. Commerce Department. Year-over-year, total nonresidential construction spending is up 2.6 percent, slightly higher than inflation.

Private nonresidential construction spending slipped 0.1 percent for the month, but remains 8.8 percent higher than the same time last year. Public nonresidential construction spending decreased 0.8 percent for the month and is 3.6 percent lower than one year ago.

Nonresidential construction subsectors posting the largest decreases in spending for the month include religious, down 6.1 percent; health care, down 4.9 percent; commercial, down 4.5 percent; lodging, down 2.7 percent; and office, down 2.1 percent. Construction subsectors that experienced decreases in spending year-over-year include religious, down 16.8 percent; water supply, down 12.7 percent; conservation and development, down 6.5 percent; and educational, down 3.2 percent.

Six out of sixteen nonresidential construction subsectors posted increases for the month, including communication, up 6.4 percent; manufacturing, up 3.5 percent; amusement and recreation, up 2.8 percent; conservation and development, up 2.8 percent; transportation, up 2.4 percent; and power, up 1.3 percent. One-half of the nonresidential construction subsectors experienced increases in spending on a year-over-year basis, including lodging, up 25 percent; power, up 19.2 percent; transportation, up11percent; and office, up 2.4 percent.

Residential construction spending jumped 2.7 percent for the month and 19.2 percent higher compared to the same time last year. Total construction spending, which encompasses nonresidential and residential spending, was up 0.6 percent for the month and 7.8 percent higher compared to September 2011.

Analysis

“Concerns regarding the fiscal cliff, a slowing global economy and perhaps the November elections became more apparent in September’s construction spending data,” said Associated Builders and Contractors Chief Economist Anirban Basu. “A number of construction segments that were expanding in prior months retreated in September, including healthcare, commercial construction and office.

“It is likely that some members of the developer/owner community are putting their projects on hold in the hope that future months will bring in more policy and economic transparency and stability,” Basu said. “The implication is when various sources of uncertainty are addressed, including issues related to automatic sequestration, Europe and the Middle East, there will be a re-acceleration of nonresidential construction spending.

“Despite economic uncertainty, some construction segments are experiencing increased levels of spending, including manufacturing and power,” said Basu. “In stark contrast, projects closely associated with public sector capital budgets continue to fall.

“In prior months, there was a well-established pattern of private construction spending gains offset by public construction spending losses,” Basu said. “That pattern no longer exists as both private and public construction spending are in decline.

“It is suspected that October will be another month of hesitation among many economic decision-makers that will show lackluster nonresidential construction performance,” said Basu. “The forecast is for subdued construction in the months ahead, with more rapid recovery expected late next year.”

To view the previous Spending report, click here.