Total construction spending ticked up from June to July, as gains in residential and public construction offset a dip in private nonresidential projects, according to a new analysis of federal construction spending data the Associated General Contractors of America released today. Officials noted, however, that challenges remain for the industry, particularly because of continuing problems with coronavirus flare-ups and supply-chain disruptions.
“Although nonresidential construction is no longer in free fall, many categories face continuing challenges,” said Ken Simonson, the association’s chief economist. “The rapid spread of the delta variant of COVID-19 is causing a pullback in re-openings and travel that may lead some owners to postpone new projects. Meanwhile, materials price increases, limited supplies of key materials, and long or uncertain delivery times are impeding the industry’s recovery.”
Construction spending in July totaled $1.57 trillion at a seasonally adjusted annual rate, an increase of 0.3% from June, and 9.0% higher than the pandemic-depressed rate in July 2020. Once again, residential construction saw monthly and year-over-year gains, while nonresidential construction spending posted mixed results. The residential construction segment climbed 0.5% for the month and 26.5% year-over-year. Combined private and public nonresidential construction spending inched up 0.1% compared to June but declined 4.2% compared to July 2020.
Private nonresidential construction spending fell 0.2% from June to July and 3.6% since July 2020. The largest private nonresidential category, power construction, decreased by 0.7% from June to July and 0.9% year-over-year. Among the other large private nonresidential project types, commercial construction—comprising retail, warehouse and farm structures—was essentially unchanged for the second month in a row but higher than in July 2020 by 4.6%. Manufacturing construction spending was also nearly unchanged for the month and up 1.8% from a year earlier. Office construction decreased 0.1% compared to June and 6.1% year-over-year.
Public construction spending increased 0.7% for the month but was 5.1% lower year-over-year. Among the largest segments, highway and street construction gained 1.9% compared to June but dipped 0.1% over 12 months. Public educational construction fell 0.5% in July and 6.4% year-over-year. Spending on transportation facilities was up 0.3% from June but fell 4.2% from July 2020.
Association officials said the spending figures highlight some of the challenges the industry is facing amid a resurgent coronavirus and ongoing supply chain problems. They added that the association will release more details on how demand for new projects and workforce supply are being impacted by the coronavirus during a virtual media event at noon on Thursday, September 2nd with Autodesk.
“We are starting to get a more complete picture of how the resurgent coronavirus and policy responses to it are impacting the construction industry,” said Stephen E. Sandherr, the association’s chief executive officer. “The industry will not be out of the woods without new federal infrastructure investments and support for workforce development.”
Related Stories
Giants 400 | Sep 5, 2023
Top 80 Construction Management Firms for 2023
Alfa Tech, CBRE Group, Skyline Construction, Hill International, and JLL top the rankings of the nation's largest construction management (as agent) and program/project management firms for nonresidential buildings and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Sep 5, 2023
Top 150 Contractors for 2023
Turner Construction, STO Building Group, DPR Construction, Whiting-Turner Contracting Co., and Clark Group head the ranking of the nation's largest general contractors, CM at risk firms, and design-builders for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Market Data | Sep 5, 2023
Nonresidential construction spending increased 0.1% in July 2023
National nonresidential construction spending grew 0.1% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.08 trillion and is up 16.5% year over year.
Giants 400 | Aug 31, 2023
Top 35 Engineering Architecture Firms for 2023
Jacobs, AECOM, Alfa Tech, Burns & McDonnell, and Ramboll top the rankings of the nation's largest engineering architecture (EA) firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Aug 22, 2023
Top 115 Architecture Engineering Firms for 2023
Stantec, HDR, Page, HOK, and Arcadis North America top the rankings of the nation's largest architecture engineering (AE) firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Aug 22, 2023
2023 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms
A record 552 AEC firms submitted data for BD+C's 2023 Giants 400 Report. The final report includes 137 rankings across 25 building sectors and specialty categories.
Giants 400 | Aug 22, 2023
Top 175 Architecture Firms for 2023
Gensler, HKS, Perkins&Will, Corgan, and Perkins Eastman top the rankings of the nation's largest architecture firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Apartments | Aug 22, 2023
Key takeaways from RCLCO's 2023 apartment renter preferences study
Gregg Logan, Managing Director of real estate consulting firm RCLCO, reveals the highlights of RCLCO's new research study, “2023 Rental Consumer Preferences Report.” Logan speaks with BD+C's Robert Cassidy.
Market Data | Aug 18, 2023
Construction soldiers on, despite rising materials and labor costs
Quarterly analyses from Skanska, Mortenson, and Gordian show nonresidential building still subject to materials and labor volatility, and regional disparities.
Apartments | Aug 14, 2023
Yardi Matrix updates near-term multifamily supply forecast
The multifamily housing supply could increase by up to nearly 7% by the end of 2023, states the latest Multifamily Supply Forecast from Yardi Matrix.