Nonresidential spending up, construction job openings down in August

National nonresidential construction spending increased 0.4 percent in August, according to an Associated Builders & Contractors (ABC) analysis of U.S. Census Bureau data.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.09 trillion.

Spending was up on a monthly basis in 12 of the 16 nonresidential subcategories. Private nonresidential spending increased by 0.3 percent, while public nonresidential construction spending was up 0.6 percent in August.

“Aggregate nonresidential construction spending expanded at a respectable rate in August,” says Anirban Basu, ABC’s chief economist. “But manufacturing-related and public sector projects accounted for more than 100 percent of the monthly increase. Privately financed commercial- and educational-related construction spending declined by almost 1 percent at least partially due to elevated borrowing costs.

“Despite high interest rates and ongoing weakness in certain segments like office and retail, contractors remain relatively upbeat,” he adds. “Despite still-high materials costs and ongoing labor shortages, a plurality of contractors expect their profit margins to increase over the next six months, according to ABC’s Construction Confidence Index.”

Construction employment

The construction industry had 350,000 job openings on the last day of August, according to an ABC analysis of the U.S. Bureau of Labor Statistics’ Job Openings & Labor Turnover Survey.

Industry job openings decreased by 3,000 last month but are up by 5,000 from the same time last year.

“The number of open, unfilled construction positions declined in August but remains higher than both one year ago and the pre-pandemic level,” Basu says. “Despite the year-over-year increase, the rate at which construction workers are quitting has slowed dramatically as labor constraints ease in other industries that compete for the same workers. With a majority of contractors looking to expand their staffing levels over the next six months, according to ABC’s Construction Confidence Index, any improvements in the labor supply will help contractors keep project costs under control.”