TRD Insights: US hospitality construction spending was dropping before pandemic

Amount spent on construction across sectors ticked up in March year over year, but hotel and lodging fell 13%

TRD New York TRD INSIGHTS /
May.May 05, 2020 03:00 PM
U.S. hospitality construction spending was dropping even before the pandemic took hold, according to new Census data.

U.S. hospitality construction spending was dropping even before the pandemic took hold, according to new Census data.

Hotel construction spending was already on the decline across the U.S. long before the coronavirus essentially shut down the industry in late March, and paused all construction.

Hotel and lodging construction spending dropped to $29.7 billion in March, from $34.2 billion over the same period in 2019, according to new U.S. Census Bureau data The Real Deal analyzed. The coronavirus pandemic has kneecapped the hotel industry, as sliding occupancy rates have forced major hospitality companies to lay off or furlough huge chunks of their workforce.

Nationwide, U.S. construction spending in March inched up year-over-year, but much of that was in the first couple of weeks, before the coronavirus fully took hold. Much of the country remained under statewide stay-at-home orders until recent weeks, which has closed nonessential businesses and halted most construction projects.

Seasonally-adjusted construction spending in March rose 4.7 percent across the U.S. to $1.36 trillion from $1.29 trillion in March 2019. Spending was also slightly higher than the February figure, which stood at $1.35 trillion.

Spending varied considerably by industry, however.

Public safety construction spending increased to $13.3 billion, over 45 percent above its March 2019 level of $9.1 billion. However, historical construction spending data shows that public safety-related construction expenditures have been steadily rising since November.

As with most Census statistics, these construction estimates depend on incomplete survey data that needs to be extrapolated due to nonresponse from municipal governments. For that reason, construction estimates have margins of error. If an estimate’s margin of error includes zero, that means there is insufficient evidence of a real change in construction spending.

Value of Construction Put in Place in the United States, Seasonally Adjusted Annual Rate

 
Type of Construction
Mar 2020Feb 2020Jan 2020Dec 2019Nov 2019Mar 2019Percent Change, March 2020 - Feb 2020Percent Change, March 2020 - March 2019
Total Construction1,360,5121,348,3861,382,9631,347,3331,342,4901,299,1180.94.7
Residential557,895545,237572,162553,837542,838512,0552.39.0
Nonresidential802,618803,148810,801793,497799,653787,063-0.12.0
Lodging29,74230,40531,38931,99232,39034,231-2.2-13.1
Office79,26479,55879,95980,02180,31878,982-0.40.4
Commercial88,52289,41191,70988,23587,93586,293-1.02.6
Health care45,65145,02245,88444,34544,32245,0951.41.2
Educational97,68298,15298,72498,06299,88697,485-0.50.2
Religious2,8582,9733,0422,9733,1362,941-3.9-2.8
Public safety13,27512,59812,25010,81510,8099,1415.445.2
Amusement and recreation26,54127,00127,17327,63427,90828,209-1.7-5.9
Transportation55,46355,88255,50454,71355,08752,492-0.75.7
Communication23,47023,39723,61323,73823,48923,9610.3-2.0
Power104,654106,482107,714103,549102,781100,734-1.73.9
Highway and street108,567103,928104,24997,15095,578103,0794.55.3
Sewage and waste disposal25,71025,83726,21226,21426,52524,829-0.53.5
Water supply18,53918,59818,22217,96918,25315,051-0.323.2
Conservation and development8,7059,56310,31210,0599,7958,984-9.0-3.1
Manufacturing73,97574,34374,84576,02981,44175,556-0.5-2.1
Total Private Construction11,012,5431,005,8291,038,2841,012,9681,006,752976,6300.73.7
Residential550,266537,665564,575546,532535,764505,9312.38.8
New single family301,073307,169297,275290,868281,739268,532-2.012.1
New multifamily60,20459,01658,34557,51758,65962,9922.0-4.4
Nonresidential462,276468,164473,709466,436470,988470,699-1.3-1.8
Lodging28,94029,58330,36830,78831,02533,229-2.2-12.9
Office67,98168,28168,59168,61468,62668,597-0.4-0.9
Commercial84,05085,24087,55184,15484,10181,998-1.42.5
Health care36,31236,38137,14135,71735,25736,254-0.20.2
Educational16,76817,03517,25417,60418,17620,361-1.6-17.6
Religious2,8582,9733,0422,9733,1362,941-3.9-2.8
Amusement and recreation13,01913,26513,14913,39113,76315,282-1.9-14.8
Transportation16,30116,55316,37816,09716,15115,581-1.54.6
Communication23,38023,30723,52523,61723,37823,7640.3-1.6
Power98,022100,100100,80196,22394,82695,594-2.12.5
Manufacturing73,55774,06074,54575,80281,07675,360-0.7-2.4
Total Public Construction2347,969342,556344,679334,366335,738322,4881.67.9
Residential7,6287,5727,5877,3057,0746,1230.724.6
Nonresidential340,341334,984337,092327,061328,665316,3651.67.6
Office11,28411,27711,36911,40711,69210,3860.18.6
Commercial4,4724,1714,1584,0813,8344,2957.24.1
Health care9,3398,6428,7438,6289,0648,8418.15.6
Educational80,91381,11781,47080,45881,71077,124-0.34.9
Public safety13,16412,47412,11810,66810,6708,9495.547.1
Amusement and recreation13,52213,73614,02514,24314,14512,927-1.64.6
Transportation39,16239,32939,12638,61738,93736,911-0.46.1
Power6,6326,3826,9137,3277,9555,1403.929.0
Highway and street108,300103,502103,88796,78695,277102,6464.65.5
Sewage and waste disposal25,40625,50425,73525,66925,96324,068-0.45.6
Water supply18,18318,15417,89117,65517,88514,7160.223.6
Conservation and development8,6559,50210,2509,9729,6958,966-8.9-3.5

(Millions of dollars. Details may not add to totals due to rounding.)


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