According to Ken Simonson, chief economist for The Associated General Contractors of America (AGC), reports from the U.S. Census Bureau on construction spending in September and the National Association for Business Economics (NABE) on third-quarter activity indicate that “Nonresidential construction is on the verge of a potentially long slide.”
“The Census figures show nonresidential spending eked out a gain in September of 0.1%,” Simonson said. “But private nonresidential spending was down nearly 1% from its high-water mark in June, while public spending tumbled 1.3% in September alone.
“Contractors have been reporting that developers put lots of projects on hold because of the credit freeze and weakening demand for stores, offices and other facilities,” Simonson added. “Meanwhile, states [have] had to postpone construction bond issues or defer budgeted projects in order to meet balanced-budget mandates.”