Spending on manufacturing construction projects increased 5.9% in January and is up 53.6% since January of 2022, according to an Associated Builders and Contractors analysis of recent U.S. Census Bureau data.
On a seasonally adjusted basis, national spending across all nonresidential construction categories totaled $968.7 billion for January 2023, propped up mainly by the manufacturing sector. Spending was down on a monthly basis in seven of 16 nonresidential subcategories, holding down the overall spending increase across all nonresidential categories to 0.3%.
“Excluding manufacturing-related construction, nonresidential spending actually declined in January,” ABC Chief Economist Anirban Basu said. “A combination of headwinds, including severely elevated borrowing costs, ongoing labor shortages and still-high input costs are likely to blame.”
However, despite these factors, most contractors can continue to expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index.
“On a year-over-year basis, spending in the nonresidential sector continues to outpace inflation,” Basu said. “That’s largely attributable to strength in the industrial segment; manufacturing-related construction spending surged 5.9% in January and is up by an astonishing 53.6% since January 2022.
“With the CHIPS and Science Act directing $280 billion into semiconductor manufacturing and an ongoing desire to reshore manufacturing capacity, the segment should continue to thrive,” Basu said.
The breakdown of the percentage change in construction spending in the 16 nonresidential subcategories for the 12-month period between January 2022 and January 2023 includes:
- Conservation & development +21.7%
- Manufacturing +53.6%
- Religious +11.2%
- Transportation + 9.2%
- Power – 4.6%
- Lodging +39.7%
- Office +13.8%
- Healthcare +12.4%
- Communication + 3.4%
- Educational + 6.3%
- Highway & Street +16.3%
- Amusement & Recreation +10.9%
- Public Safety + 9.4%
- Sewage & Waste Disposal +17.3%
- Commercial +22.1%
- Water Supply +17%