The latest analysis of U.S. Census Bureau data by Associated Builders and Contractors found that July expenditures on nonresidential construction slipped 0.3% month-to-month but actually increased 0.1% over July of last year.

Also showing a gain, both monthly and for the year, was public nonresidential construction: up 0.4% and 4.3% respectively. Conversely, private nonresidential construction lost pace in both gauges: 0.8% for the month and 2.7% year-to-date.

"While there is much discussion regarding the extent to which the U.S. economy has slowed and will slow going forward, these considerations have relatively little to do with today's nonresidential construction spending data," said ABC chief economist Anirban Basu. "Trends in nonresidential construction tend to lag the broader economy by a year to 18 months, which means that today's construction spending numbers reflect in large measure broader economic dynamics characterizing 2018. Last year was a good one for the economy, persuading many to move ahead with projects."

He believes that the recent data was influenced by additional factors such as concerns about overbuilding and higher capital costs in the private nonresidential construction sector.

"Public spending growth, despite solid numbers in July, has been more erratic of late," Basu adds. "This may have something to do with the looming insolvency of the Highway Trust Fund, which is expected in 2021 without congressional action. There is already evidence that some states have begun to postpone planning for new projects until there is more clarity regarding federal infrastructure spending, evident in the 2.7% spending decline observed in the highway and street category."