(IND) Nonresidential Building Construction Advances in November

Nonresidential building construction spending rose 0.8% at a seasonally adjusted (SA) rate in November following a 4.2% surge in October. On a year-to-date not seasonally adjusted (NSA) basis, nonresidential building construction spending was almost unchanged (down 0.1%) from the same period in 2012. The September and October spending numbers were revised up by $7.0 billion and $8.8 billion, respectively—2.4% and 2.9% of the previously reported spending numbers.

“For lease” private projects spending continued its recent upward trend, jumping 3.1% (SA) in November after shooting up 4.5% in October. Year-to-date for lease NSA spending was up 4.9% from the same period in 2012.

Construction spending for lodging was the one weak area in the for lease category in November, slipping 0.2%. However, that marked only the second decline for lodging over the ten months from February through November. Office construction spending climbed 2.6% in November after increasing an even stronger 2.9% in October. Retail construction spending has surged in recent months, rising 4.5% in November after a robust increase of 5.8% in October. On a year-to-date NSA basis compared to the same period in 2012, lodging spending was up 23.5%; office construction spending, despite recent gains, was down 1.1%; and retail construction spending was up 5.3%.

Institutional construction continues to struggle. After soaring 4.5% in October, institutional construction spending decreased 0.7% in November. Year-to-date, NSA institutional spending was down 5.2% from the same period in 2012.

Education construction spending, accounting for over half of the construction spending of the group, managed to hold on to its October gain of 6.7%, inching up 0.2% in November. Nonetheless, year-to-date NSA spending was down 5.9% from the same period in 2012. Health care construction spending, the group’s second largest spending category, did not hold on to its 2.4% October gain, dropping 2.8% in November. On a year-to-date basis, all of the categories for the group were down from the same period in 2012.

Manufacturing construction spending advanced 0.6% in November following a 2.8% increase in October. Year-to-date NSA manufacturing construction spending was up 7.2% from the same period in 2012.

U.S. Nonresidential Construction (billions of U.S. current dollars)
	Monthly Figures (1) (latest actual values)			3-Month Moving Average			Year-to-Date (NSA)
	Sep-13	Oct-13	Nov-13	Sep-13	Oct-13	Nov-13	Jan-12 to Nov-12	Jan-13 to Nov-13
For Lease	102.6	107.2	110.6	102.0	103.8	106.8	88.5	92.8
Month-over-Month   % Change	1.0%	4.5%	3.1%	1.8%	1.8%	2.9%
Year-over-year   % Change (NSA)	3.1%	6.1%	15.1%	4.4%	4.4%	7.9%	9.1%	4.9%
Lodging	14.8	15.5	15.5	14.7	15.0	15.2	10.4	12.8
	0.2%	4.5%	-0.2%	2.2%	1.9%	1.5%
	26.7%	20.9%	31.3%	24.8%	23.4%	26.1%	25.2%	23.5%
Office	38.3	39.4	40.5	38.4	38.8	39.4	35.3	34.9
	-0.6%	2.9%	2.6%	1.2%	0.8%	1.7%
	-4.0%	-1.3%	5.8%	-1.0%	-2.2%	0.0%	7.4%	-1.1%
Commercial      (mainly retail)	49.5	52.3	54.7	48.8	50.0	52.2	42.8	45.1
	2.5%	5.8%	4.5%	2.1%	2.5%	4.3%
	3.7%	8.5%	18.7%	4.0%	5.2%	10.0%	7.1%	5.3%
Institutional	145.4	151.9	150.8	147.5	148.6	149.4	144.0	136.5
	-2.1%	4.5%	-0.7%	-0.3%	0.8%	0.5%
	-5.6%	-1.2%	0.3%	-5.7%	-3.7%	-2.0%	0.2%	-5.2%
Health Care	40.5	41.5	40.3	40.8	41.0	40.8	38.5	37.4
	-1.6%	2.4%	-2.8%	0.5%	0.5%	-0.7%
	-0.6%	-0.5%	-1.3%	-2.4%	-1.6%	-0.8%	4.5%	-2.9%
Education	76.7	81.9	82.1	79.3	79.4	80.2	78.7	74.1
	-3.6%	6.7%	0.2%	-1.6%	0.1%	1.0%
	-8.0%	-1.5%	1.3%	-6.8%	-5.0%	-3.0%	0.0%	-5.9%
Religious	3.2	3.2	3.3	3.3	3.2	3.2	3.5	3.2
	-3.7%	2.7%	0.6%	-2.0%	-1.0%	-0.2%
	-15.2%	-15.2%	-5.4%	-13.5%	-14.3%	-12.1%	-10.9%	-9.3%
Public Safety	9.5	9.9	9.8	9.1	9.6	9.7	9.5	8.7
	1.6%	3.6%	-0.3%	0.4%	5.0%	1.6%
	-4.8%	-0.8%	1.3%	-10.2%	-5.1%	-1.6%	0.0%	-9.1%
Amusement/      Recreation	15.5	15.4	15.4	14.9	15.3	15.4	13.9	13.3
	2.7%	-0.3%	-0.6%	4.0%	2.7%	0.6%
	1.4%	2.5%	3.2%	-2.2%	1.4%	2.4%	-5.8%	-4.5%
Manufacturing	53.2	54.7	55.0	51.6	53.1	54.3	42.5	45.5
	3.7%	2.8%	0.6%	6.4%	2.8%	2.3%
	11.5%	14.4%	16.9%	10.1%	12.3%	14.2%	19.4%	7.2%
Total (2)	301.2	313.8	316.5	301.1	305.5	310.5	275.0	274.9
	-0.1%	4.2%	0.8%	1.5%	1.4%	1.6%
	0.2%	3.8%	8.1%	-0.1%	1.4%	3.9%	5.6%	-0.1%
(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures). (2) Total may not equal the sum of its components due to rounding. Source: Census Bureau, U.S. Department of Commerce. Calculations: Reed Construction Data

The Forecast:

The Reed forecast for 2014 and 2015 is fairly positive, up 7.9% and 8.5%, respectively.

U.S. Nonresidential Construction (billions of U.S. current dollars)
	Actual				Forecast
	2009	2010	2011	2012	2013	2014	2015
For Lease	131.5	88.9	88.5	96.2	101.3	112.4	122.7
Year-over-year % Change	-31.0%	-32.4%	-0.5%	8.6%	5.3%	10.9%	9.2%
Lodging	25.5	11.6	9.1	11.4	14.1	16.3	18.3
	-28.8%	-54.4%	-21.5%	25.1%	23.4%	15.7%	12.2%
Office	51.9	37.9	36.0	38.4	38.1	42.1	45.0
	-24.3%	-27.1%	-4.9%	6.7%	-0.8%	10.5%	6.8%
Commercial (mainly retail)	54.1	39.5	43.4	46.3	49.1	53.9	59.4
	-37.3%	-27.0%	10.0%	6.7%	5.9%	10.0%	10.1%
Institutional	187.4	161.1	155.8	155.5	148.0	153.6	164.3
	-3.4%	-14.0%	-3.3%	-0.2%	-4.8%	3.8%	7.0%
Health Care	44.8	39.3	40.2	41.8	40.8	43.1	48.0
	-4.4%	-12.3%	2.2%	4.0%	-2.5%	5.7%	11.5%
Education	103.2	88.4	85.0	84.6	79.9	81.0	84.3
	-1.6%	-14.3%	-3.9%	-0.4%	-5.6%	1.5%	4.0%
Religious	6.2	5.3	4.2	3.8	3.4	3.2	3.2
	-14.3%	-14.6%	-19.8%	-11.1%	-8.8%	-6.1%	0.1%
Public Safety	13.8	11.2	10.4	10.3	9.5	10.2	11.0
	5.4%	-19.1%	-6.7%	-1.1%	-7.9%	7.6%	7.7%
Amusement/Recreation	19.4	16.9	16.0	15.0	14.5	16.1	17.8
	-11.1%	-12.7%	-5.6%	-6.4%	-3.3%	11.2%	10.7%
Manufacturing	56.8	40.4	39.7	46.9	50.2	57.0	63.3
	6.8%	-29.0%	-1.7%	18.1%	7.1%	13.7%	11.1%
Total (1)	375.7	290.4	284.0	298.5	299.5	323.0	350.3
	-14.2%	-22.7%	-2.2%	5.1%	0.3%	7.9%	8.5%
(1) Total may not equal the sum of its components due to rounding. Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

Source: Reed Construction Data