Nonresidential construction spending fell by nearly 3% between September 2016 and September 2017, according to the Marcum Commercial Construction Index.
The report indicates declines in multiple subsectors during which manufacturing fell 20.3%, sewage and waste slid 10.7%, water supply declined 9.2%, power fell 8.9% and office dropped 6.1%.
However, some categories of construction spending have increased in the past year. Commercial construction spending increased 11.4% while amusement and recreation increased 11.4%. Other fields gaining ground included transportation (up 5.8%), lodging (up 5.3%) and public safety (up 4.7%). Communication, educational and health care spending also showed signs of growth.
According to Anirban Basu, Marcum’s chief construction economist and author of the index, despite sluggish spending growth in half of the nonresidential construction categories, construction firms continue to increase staffing levels. He also points to tax reform as a pending source of improvement for the industry.
“There are many proposed reforms that would impact construction firms and their owners directly or indirectly, including a much lower corporate tax rate, the elimination of the alternative minimum tax, and a lower tax rate for subchapter-S corporations and similarly situated flow-through tax entities, fewer personal income tax brackets, and the elimination of the estate tax,” he said.
Based in New York, Marcum is one of the largest independent public accounting and advisory services firms in the nation.