Construction spending during November 2020 was estimated at a seasonally adjusted annual rate of $1,459.4 billion, 0.9% (±0.8%) above the revised October estimate of $1,446.9 billion. The November figure is 3.8% (±1.3%) above the November 2019 estimate of $1,405.5 billion.
During the first 11 months of last year, construction spending amounted to $1,314.1 billion, 4.4% (±1.0%) above the $1,258.8 billion for the same period in 2019.
In November, the estimated seasonally adjusted annual rate of public construction spending was $347.6 billion, 0.2% (±1.3%) below the revised October estimate of $348.3 billion. Highway construction was at a seasonally adjusted annual rate of $97.5 billion, 1.8% (±3.5%) above the revised October estimate of $95.8 billion. Educational construction was at a seasonally adjusted annual rate of $86.7 billion, 0.3% (±1.2%) above the revised October estimate of $86.5 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,111.8 billion, 1.2% (±0.5%) above the revised October estimate of $1,098.6 billion.
- Residential construction was at a seasonally adjusted annual rate of $658.1 billion in November, 2.7% (±1.3%) above the revised October estimate of $641.0 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $453.8 billion in November, 0.8% (±0.5%) below the revised October estimate of $457.6 billion.
“Private nonresidential construction declined for the fifth straight month in November, while public nonresidential spending slipped for the fifth time in the past six months,” said Ken Simonson, Associated General Contractors of America chief economist. “Unfortunately, our latest survey finds contractors expect the volume of projects available to bid on in 2021 will be even more meager.”
Association officials said demand for most types of nonresidential construction was likely to remain down for much of the year. In the meantime, they urged the incoming Congress to act quickly to boost investments in infrastructure and pass liability reforms to protect firms that employ necessary safety protocols to protect their workers and the public from meritless coronavirus lawsuits.
“Without additional measures to boost demand for nonresidential construction, this year is likely to be a challenging one for the industry,” said Stephen E. Sandherr, the association’s chief executive officer. “The impacts of the pandemic are clearly accumulating for many construction employers.”
“Typically, spending patterns in nonresidential construction lag behind those of the overall economy by 12 to 18 months,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “But the pandemic-induced downturn of 2020 was so abrupt and created such massive issues for developers, state and local governments, and others who purchase construction services that the impact on nonresidential construction was virtually immediate. As a result, private nonresidential construction spending is down 9.5% since November 2019.
“The single hardest hit segment of the industry is lodging, a category in which construction spending declined more than 8% in a single month and 27% since the same time last year,” said Basu. “While leisure travel is likely to rebound as more Americans are vaccinated, business travel may take years to recover. This bodes poorly for the construction of hotels with elaborate meeting spaces located in central business districts or close to airports.
“The near-term nonresidential construction spending outlook is generally not positive,” said Basu. “While there will be certain construction segments that remain active, including data centers, fulfillment centers and certain healthcare facilities, commercial construction is positioned to be weak for the next several quarters. This is reflected in ABC’s Construction Backlog Indicator, which in November reached its lowest level since the beginning of 2011.
“Many public segments have also experienced declines in spending in recent months,” said Basu. “The good news is that public construction may receive a substantial boost from post-inauguration stimulus. Infrastructure investment often produces additional opportunities for profitable private development. Suburban commercial developers may also take heart in America’s ongoing residential construction boom, with residential construction spending up more than 16% on a year-over-year basis, as interest in homeownership surges.”