Nonresidential construction dropped nationally in the third quarter even as the economy continues to grow, the accounting firm Marcum LLP reported Thursday in a new index.
The level of investment in nonresidential construction fell by 4.4 percent compared to a year earlier, according to the index which Marcum economists derived from data from the U.S. Bureau of Economic Analysis, U.S. Census Bureau, and the U.S. Bureau of Labor Statistics. During the same time period the broader economy expanded by 2 percent, the report said.
The reported cited fears over the “fiscal cliff,” tight credit markets, and high vacancies as reasons for the slow recovery in the sector. In September, commercial construction dropped to $559.4 billion, a 0.4 percent decline compared to a year earlier. The index includes both private commercial construction and public infrastructure construction. Public spending dropped more sharply than private construction, falling by 0.8 percent versus 0.1 percent.
Though the report doesn’t break out regional data, its author, economist Anirban Basu, said that the recovery in nonresidential construction has been weaker in the New York Region than in other parts of the country, though that might change.
“In the month preceding hurricane Sandy [New York and New Jersey] had suffered some of the most significant [construction] job loss in the United States,” Basu said. “The destruction caused by hurricane Sandy probably turns that around and New York and New Jersey are likely to be leading in construction job growth.”
Marcum, based in Manhattan, has an office on Long Island.