NEW HAVEN –– Nationwide, investment in nonresidential construction declined 4.4 percent in the third quarter of 2012, despite 2.2 percent annualized growth in the U.S. economy, according to the Marcum Commercial Construction Index, a new quarterly index tracking the performance of the U.S. commercial construction industry.
Year-over-year national nonresidential construction spending rose just 2.6 percent in the third quarter, compared to more than 19 percent growth in residential construction.
During 2012, sectors relying mainly on state and government capital funding declined most in spending, including water supply, down 12.7 percent, conservation and development, down 6.5 percent, education, down 3.2 percent and highway and street, down 2.2 percent.
Rapidly recovering sectors were lodging, up 25 percent, power, up 19.2 percent and transportation, up 11 percent.
In his report, Anirban Basu, chief construction economist for Marcum, a major accounting and advisory firm, attributed the slow recovery in nonresidential construction to tight credit, high vacancy rates and cautious investors, among other factors. He says the second half of 2013 could be “surprisingly good” for nonresidential construction if the White House and Congress manage not to tumble off the fiscal cliff, because of the large number of projects placed on hold during 2012.