Nonresidential construction sees spending slump in July

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Nonresidential construction nationwide saw a 1.2% drop in spending from June to July, offsetting a 2.1% increase in residential spending.

An analysis by the Associated General Contractors of America of federal data also found that construction employment decreased in July 2020 compared to the previous July in two-thirds on the nation’s metro areas.

Construction spending in July totaled $1.36 trillion at a seasonally adjusted annual rate, a gain of 0.1% from June. An increase in residential spending was boosted by growth in single-family (3.1%) and multifamily construction (4.9%), according to the analysis (.pdf).

Hampered by a 3.1% drop in highway and street construction and a 3% drop in educational construction, public construction spending decreased by 1.3% in July 2020. Private nonresidential construction dropped 1%, with its largest segment, power construction, dropping 0.1%.  

Commercial construction, comprising retail, warehouse and farm structures, dropped 3.2%, while manufacturing construction rose 0.2% and office construction fell 0.7%.

“The dichotomy between slumping nonresidential projects — both public and private — and robust homebuilding seems sure to widen as the pandemic continues to devastate state and local finances and much of the private sector,” Ken Simonson, AGC chief economist, said in a news release. “Without new federal investments in infrastructure and other measures to boost demand for nonresidential construction, contractors will be forced to let more workers go.”

South Carolina saw a statewide drop of minus-1% construction jobs from July 2019 to July 2020, shedding 700 jobs (107,800 to 107,100). There was also a statewide dip of minus-1% in mining, logging and construction jobs in that time frame as the state dropped 1,000 jobs (112,300 to 111,300).

Columbia was alone among S.C. metro areas in gaining jobs in the 12-month period, going from 17,400 mining, logging and construction jobs in July 2019 to 17,600 in July 2020. The 200 jobs gained represented a 1% increase.

Spartanburg held steady at 7,800 jobs, while other areas saw decreases. Charleston-North Charleston dropped 500 jobs (minus-2% to 21,600); Greenville-Anderson-Mauldin dropped 200 jobs (minus-1% to 19,300); and Myrtle Beach-Conway-North Myrtle Beach dropped 100 jobs (minus-1% to 10,900).

Construction employment declined from July 2019 to July 2020 in 66%, or 238 out of 358, metro areas, led by New York City’s loss of 26,500 jobs.