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Construction spending plummets in worst downturn on record

The Milwaukee skyline is seen Tuesday, July 28, 2020, in Milwaukee. (AP Photo/Morry Gash)

The Milwaukee skyline is seen Tuesday. Nonresidential fixed investment fell by 27% in the second quarter, and residential investment dropped 38.7% as the construction industry wasn’t immune from the economic downturn. (AP Photo/Morry Gash)

Although the construction industry has generally continued working throughout the COVID-19 pandemic, new figures released Thursday show contractors are not immune to the economic fallout from the coronavirus pandemic.

The U.S. economy contracted 32.9% in the second quarter of 2020, marking the largest economic downturn on record. Although contractors haven’t stopped working during the pandemic, figures released by the U.S. Bureau of Economic Analysis and analyzed by the Associated Builders and Contractors on Thursday show the industry suffered along with the rest of the economy.

“Despite construction’s status as an essential industry in most cities and states, the sector did not escape the wrath of COVID-19 during the worst economic quarter on record,” said Anirban Basu, ABC chief economist.

Nonresidential fixed investment fell by 27% in the second quarter, and residential investment dropped 38.7%. In the first quarter of the year, in contrast, fixed investment in nonresidential projects had fallen 6.7% and residential investment had increased 19 percent.

The economic figures show the construction industry had a chaotic second quarter. Many contractors reported interruptions in supply chains, project cancellations or delays amid a patchwork of local mandates meant to slow the spread of COVID-19.

Basu said with the pandemic far from over, the industry is likely to wrestle with even more economic fallout in coming months.

“With case counts spiking in parts of the nation, the U.S. economy has yet to begin a rapid economic recovery,” said Basu. “While May and June represented periods of robust economic bounce back in terms of employment, retail sales, building permits and manufacturing activity, recovery will become more erratic over the next several months.”

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).


  1. Very INACCURATE information. I notice they do not say how where they came up with this information. Where did these numbers come from. Commercial construction NEVER stopped. I seen numbers where comemrcial was only down 2 or 3 % in May and june. Nice to see you spreading doom and gloo, with inaccurate infromation

  2. These numbers don’t jive with any legitimate construction data collecting companies. Not Dodge, not FMI, not NAHB, not AGC.

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