Aug 6, 2021 - Economy & Business

Houses of worship have been left out of the construction boom

Data: U.S. Census Bureau, FRED; Chart: Axios Visuals
Data: U.S. Census Bureau, FRED; Chart: Axios Visuals

Construction spending in the U.S. has risen steadily since the financial crisis, and as of June sat at a near-record annualized rate of $1.55 trillion. Delving into the data, the dollars spent in most categories of construction grew along with the overall economic expansion.

The intrigue: One segment bucks the trend most noticeably. Construction of religious facilities has fallen sharply over the past two decades.

Why it matters: Construction spending provides insights into the economic growth of the U.S., and about what Americans are investing in.

  • Similar to how the decline of brick and mortar retail stores doesn’t necessarily reflect an outright decline in shopping, the way people worship is also evolving.

By the numbers: Construction spending on religious facilities touched a record low annualized rate of $3 billion in June. This is a 66% decline from its $8.8 billion record high in August 2003, according to Census data.

  • Meanwhile, construction spending on amusement and recreation facilities surged 42% from $7.7 billion in August 2003 to $10.9 billion as of June.
  • Educational buildings, office space, and sewage and waste facilities are among the categories with rising spend in recent years.

Details: Religious facilities in the dataset include houses of worship such as churches, mosques, synagogues and temples. They do not include certain buildings owned by religious organizations like college facilities and hospitals.

Between the lines: According to Gallup, just 47% of U.S. adults said they were a member of a church, synagogue or mosque in 2020. This was the first time ever this group wasn’t the majority.

Yes, but: Rev. David Schoen, a minister for the United Church of Christ Church Building & Loan Fund, follows church closures closely and tells Axios that the decline in construction doesn’t tell the whole story.

  • Schoen notes that worshippers are engaging in other ways, like through online portals. They're also meeting in schools and warehouses.
  • "There's a number of churches on the market that can be bought," Schoen adds. "So there's not a whole lot of new construction."

What to watch: "Millennials have been a little later in terms of partnering and having children and moving to the suburbs," Kermit Baker, chief economist for The American Institute of Architects, tells Axios.

  • "I think all that sort of feeds into the decision to get affiliated with a religious organization."
  • Baker doesn’t think trends will reverse as millennials get older, but says maybe they "begin to stabilize."

The bottom line: Religious construction is a small part of the overall picture. But category trends provide insight into why aggregate measures of data are going up or down.

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