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Commercial construction spending trails other nonresidential segments


The U.S. Census Bureau reported a 1.8 percent increase in private nonresidential construction spending in April from March, but commercial construction fell 2.6 percent for the month.

Spending hikes in the power plant, communication and manufacturing subsectors contributed to the overall increase, posting gains of 7.2 percent, 6 percent and 3.8 percent, respectively.

“With the overwhelming majority of stimulus dollars yet to be distributed and spent, many nonresidential construction segments can expect even better months ahead, though office and commercial construction will likely lag for the foreseeable future,” said Anirban Basu, chief economist with Associated Builders and Contractors Inc.

Since April 2008, commercial construction spending has fallen 24.4 percent and office construction spending is down 10.5 percent.

Though job losses, tight credit and diminished consumer and business spending continue to stifle commercial and office construction spending, Basu said “other nonresidential segments have more than compensated for lost dollar volume in those categories.”

“In light of the historic downturn in the national economy, and the ongoing credit crunch, the performance of nonresidential construction remains remarkably solid,” he said.

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