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Financials
Nonresidential growth offsets weak residential September
Nonresidential construction experienced continued robust growth in September, climbing 1.8 percent compared to August and 16.7 percent year-over-year, according to an Oct. 31 report from the Census Bureau.
The strong nonresidential sector offset a continued decline in residential construction that slipped 1.4 percent from August and 16.4 percent from September 2006. Total construction, as a result, edged up 0.3 percent for the month, according to the report.
“Investment in private nonresidential structures jumped 12 percent in the third quarter. … You have to go back to the mid-1950s to find another period when private nonresidential construction was so persistently robust,” said Ken Simonson, chief economist for the Associated General Contractors of America of Arlington, Va., in an Oct. 31 release.
All 16 nonresidential building segments experienced gains from August to September, according to the Census report, with lodging leading the way, up 6.1 percent for the month and 76 percent for the year. Office was up 1.8 percent for the month and 16.4 percent year-over-year; educational up 2 percent and 18.4 percent; and health care up 1.7 percent and 13.8 percent, according to the report.
Despite the strong nonresidential performance, “over the next several months, I expect investment to slow in income-producing properties such as office, hotel and retail structures,” Simonson said. “But accelerating investment in energy and power projects, plus continued strength in hospital and educational construction should keep the nonresidential totals up.”
Read the full Census report here.
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