ACEC Private Markets Update – September 2023

The US Census released the Quarterly Services Survey (QSS) for the 2nd quarter of 2023 and seasonally adjusted architecture and engineering services revenue increased 0.9% from the previous quarter and 9.5% year over year. This was the 7th consecutive quarter where A/E services revenue rose (since the 3rd quarter of 2021). 

Source: US Census Quarterly Services Survey, September 2023 

Fiscal policy and subsequent private investment in sectors like manufacturing and transportation are supporting these high growth levels, while the residential market slumps. These markets are more sensitive to monetary policy and are thus affected to a greater degree by mortgage rates being at the highest levels in over 20 years. 

Top Construction (Public & Private) Year to Date Project Growth by Classification 

Bottom Construction (Public & Private) Year to Date Project Growth by Classification 

The monthly Census Value of Construction Put-in-Place Survey data from September 1, 2023, reflects this. Total construction spending growth continues to be strong. Nominal values are still at all-time highs with 5.5% growth (seasonally adjusted). 

• MoM growth is 0.7%, a slight increase from last month’s 0.5% 
• Spending growth continues to vary by project classification, with Private Residential spending seeing largest YoY declines (-9.6%) and Private Manufacturing growth at 76.1% YoY 

Source: US Census Value of Construction Put in Place Survey, September 1, 2023 release 

Nonresidential spending continues to have larger share of total construction spending since crossover in September 2022 though is plateauing 

• Nonresidential project classifications grew at 19.8% YOY, an increase from last month’s 17.6% 
• Total nonresidential spending was flat at 0.1% MoM growth for the 2nd consecutive month 

Residential spending sees rebound from April 2023 low 

• While -9.6% YoY growth, monthly spending is up 2.7% from the beginning of year 
• Residential spending of $890b is highest value since September 2022 

Source: US Census Value of Construction Put in Place Survey, September 1, 2023 release