Recently released U.S. Commerce Department estimates of construction spending for the 12 months of 2012 document the early stages of recovery for most nonresidential building sectors. However, the data also underscores the depth of decline during the Great Recession and the steep uphill climb ahead.
Spending on office buildings (for both new construction and remodeling/retrofit work) rose a modest 5.2 percent between 2011 and 2012. This followed steep declines in 2009, 2010 and – to a lesser extent – in 2011. The dollar-value of office building construction last year rose to $36.6 billion – a level still 47 percent below its 2008 peak. Similarly, spending on commercial buildings (primarily retail stores, malls, restaurants, etc.) was up 8.2 percent between 2011 and 2012 – but to a level still representing only 53 percent of the $89.7 billion recorded during the peak year of 2007.
Construction in the lodging sector registered the biggest gain last year – but also has the furthest to go to reach its 2008 peak spending level of $35.8 billion. Spending on hotels and motels rose a healthy 24.7 percent during 2012, but the dollar-value level represented less than one-third (only 31 percent) of the peak level recorded just four years earlier.