Warehouse sector feels the pinch; commercial construction falls

by Christopher Brinckerhoff | 5 December 2023 3:46 pm

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Construction spending (not adjusted for inflation) totaled $227 trillion in October at a seasonally adjusted annual rate, up 0.6 percent from the upwardly revised September rate and up 11 percent year over year, according to a U.S. Census Bureau report based on an Associated General Contractors of America (AGC) analysis. However, without a deflator, it is impossible to say how much of the year-over-year gain is in units versus price.

Private residential construction rose 1.2 percent for the month, with single-family homebuilding up 1.1 percent (the sixth monthly gain in a row), multifamily construction spending down 0.2 percent (the second consecutive decrease), and owner-occupied improvements up 2 percent.

Private nonresidential construction spending inched up 0.1 percent for the month. The largest private nonresidential segment (based on the seasonally adjusted October rate), manufacturing construction, rose 0.9 percent (with gains of 0.1 percent for computer/electronic/electrical plants, 2.6 percent for chemical and pharmaceutical plants, and 4.4 percent for transportation equipment plants).

Commercial construction slumped 1.5 percent (consisting of warehouse, down 3.2 percent; retail, down 0.6 percent; and farm, up 5.4 percent). Power rose 1.2 percent (with electric power up 1.3 percent, and oil and gas field structures and pipelines up 0.8 percent). Private office and data center construction rose 0.1 percent. Public construction spending increased by 0.2 percent. The largest public segment, highway and street construction, fell 0.3 percent. Public education rose 0.4 percent. Public transportation construction declined 0.6 percent.

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