flexiblefullpage -
billboard - default
interstitial1 - interstitial
Currently Reading

Construction spending rebounds in October

billboard - default
interstitial1 - interstitial
Market Data

Construction spending rebounds in October

Growth in most public and private nonresidential types is offsetting the decline in residential work.


By AGC | December 5, 2021
Professionals on a construction site
Courtesy AGC

Total construction spending edged higher in October, as gains in public and private project types outmatched decreases in single- and multifamily residential outlays, according to a new analysis of federal construction spending data the Associated General Contractors of America released today. Officials noted that public sector investments would likely rise in the near future because of the recently-passed infrastructure bill, but cautioned that labor shortages and supply chain problems were posing significant challenges for the industry.

“It is encouraging to see such a broad-based pickup in spending on nonresidential projects in the latest month,” said Ken Simonson, the association’s chief economist. “But the construction industry still faces major challenges from workforce shortages and supply-chain bottlenecks.”

Construction spending in October totaled $1.60 trillion at a seasonally adjusted annual rate, 0.2% above the September rate and 8.6% higher than in October 2020. Year-to-date spending in the first 10 months of 2021 combined increased 7.5% from the total for January-October 2020.

Among the 16 nonresidential project types the Census Bureau reports on, all but two posted spending increases from September to October. Total public construction spending rose 1.8% for the month, while private nonresidential spending inched up 0.2%. However, for the first 10 months of 2021 combined, nonresidential spending trailed the January-October 2020 total by 4.7%, with mixed results by type.

Combined private and public spending on electric power and oil and gas projects--the largest nonresidential segment--declined 0.6% for the month and lagged 2020 year-to-date total by 1.7%. But the other large categories all rose in October. Highway and street construction spending increased 2.4% for the month, though the year-to-date total lagged the same months of 2020 by 0.8%. Education construction rose 0.2% in October but trailed the 2020 year-to-date total by 9.2%. Commercial construction--comprising warehouse, retail, and farm structures--was nearly unchanged from September to October but was 1.9% higher for the first 10 months combined than in January-October 2020.

Residential construction spending declined for the second month in a row, slipping 0.5% from the rate in September. Nevertheless, the year-to-date total for residential spending was 24.2% higher than in the same months of 2020. Spending on new single-family houses decreased 0.8% for the month but outpaced the 2020 year-to-date total by 25.9%. Multifamily construction spending dipped 0.1% in October but topped the 2020 year-to-date total by 16.6%.

Association officials said that spending on many categories of public construction is likely to increase soon as the investments from the Bipartisan Infrastructure bill begin to flow. But they cautioned that the supply chain challenges and labor shortages were impacting construction schedules and budgets and prompting some owners to delay or cancel projects. They urged the Biden administration to explore new ways to relieve shipping delays and to invest more in career and technical education programs that serve as a pipeline into construction careers.

“Getting a handle on supply chains and encouraging more people to work in construction will go a long way in helping this industry recover,” said Stephen E. Sandherr, the association’s chief executive officer.

Related Stories

Market Data | Jan 26, 2022

2022 construction forecast: Healthcare, retail, industrial sectors to lead ‘healthy rebound’ for nonresidential construction

A panel of construction industry economists forecasts 5.4 percent growth for the nonresidential building sector in 2022, and a 6.1 percent bump in 2023.

Market Data | Jan 24, 2022

U.S. hotel construction pipeline stands at 4,814 projects/581,953 rooms at year-end 2021

Projects scheduled to start construction in the next 12 months stand at 1,821 projects/210,890 rooms at the end of the fourth quarter.

Market Data | Jan 19, 2022

Architecture firms end 2021 on a strong note

December’s Architectural Billings Index (ABI) score of 52.0 was an increase from 51.0 in November.

Market Data | Jan 13, 2022

Materials prices soar 20% in 2021 despite moderating in December

Most contractors in association survey list costs as top concern in 2022.

Market Data | Jan 12, 2022

Construction firms forsee growing demand for most types of projects

Seventy-four percent of firms plan to hire in 2022 despite supply-chain and labor challenges.

Market Data | Jan 7, 2022

Construction adds 22,000 jobs in December

Jobless rate falls to 5% as ongoing nonresidential recovery offsets rare dip in residential total.

Market Data | Jan 6, 2022

Inflation tempers optimism about construction in North America

Rider Levett Bucknall’s latest report cites labor shortages and supply chain snags among causes for cost increases.  

Market Data | Jan 6, 2022

A new survey offers a snapshot of New York’s construction market

Anchin’s poll of 20 AEC clients finds a “growing optimism,” but also multiple pressure points.

Market Data | Jan 3, 2022

Construction spending in November increases from October and year ago

Construction spending in November totaled $1.63 trillion at a seasonally adjusted annual rate.

Market Data | Dec 22, 2021

Two out of three metro areas add construction jobs from November 2020 to November 2021

Construction employment increased in 237 or 66% of 358 metro areas over the last 12 months.

boombox2 -
native1 -

More In Category




halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021

 


Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: