Total construction spending declined in September for the first time since February, as both residential and nonresidential construction slipped, according to a new analysis of federal construction spending data the Associated General Contractors of America released today. Officials urged the House of Representatives to promptly complete work on the bipartisan infrastructure bill that the Senate passed earlier this year, noting that spending on infrastructure in the first nine months of 2021 fell short of year-earlier levels.
“Spending on projects has been slowed by shortages of workers and materials, as well as extended or uncertain delivery times,” said Ken Simonson, the association’s chief economist. “And the extreme rise in materials costs is likely to mean some infrastructure projects will no longer be affordable without additional funding.”
Construction spending in September totaled $1.57 trillion at a seasonally adjusted annual rate, down 0.5% from August. Year-to-date spending in the first nine months of 2021 combined increased 7.1% from the total for January-September 2020. While both residential and nonresidential construction declined from August to September, the two categories have diverged relative to 2020 levels. Residential construction spending slipped 0.4% for the month but was 24.5% higher year-to-date. Combined private and public nonresidential construction spending decreased 0.6% in September and 5.8% year-to-date.
Most infrastructure categories posted significant year-to-date declines, Simonson pointed out. The largest public infrastructure segment, highway and street construction, was 1.3% lower than in January-September 2020. Spending on public transportation construction slumped 6.8% year-to-date. Investment in sewage and waste disposal structures was the sole exception, rising 4.3%, but public water supply projects dipped 0.9% and conservation and development construction plummeted 19.5%.
Other types of nonresidential spending also decreased year-to-date, Simonson added. Combined private and public spending on electric power and oil and gas projects declined 2.5%. Education construction slumped 10.1%. Commercial construction--comprising warehouse, retail, and farm structures--dipped 1.7%, as a 13.2% plunge in retail construction outweighed a 12.0% hike in warehouse structures. Office spending fell 9.2% and manufacturing construction inched down 0.2%.
Association officials said the almost ubiquitous downturn in infrastructure spending shows that enactment of the Bipartisan Infrastructure bill that already passed in the Senate is urgently needed. They said each day’s delay is putting the nation further behind in unclogging supply chains and enhancing competitiveness.
“This legislation advances the policy priorities that members of both parties have long said they want,” said Stephen E. Sandherr, the association’s chief executive officer. “It is disgraceful that both sides are still holding these projects hostage while sorting out other priorities. Construction workers, businesses, and the public deserve better.”
Related Stories
Market Data | Apr 29, 2019
U.S. economic growth crosses 3% threshold to begin the year
Growth was fueled by myriad factors, including personal consumption expenditures, private inventory investment, surprisingly rapid growth in exports, state and local government spending and intellectual property.
Market Data | Apr 18, 2019
ABC report: 'Confidence seems to be making a comeback in America'
The Construction Confidence Index remained strong in February, according to the Associated Builders and Contractors.
Market Data | Apr 16, 2019
ABC’s Construction Backlog Indicator rebounds in February
ABC's Construction Backlog Indicator expanded to 8.8 months in February 2019.
Market Data | Apr 8, 2019
Engineering, construction spending to rise 3% in 2019: FMI outlook
Top-performing segments forecast in 2019 include transportation, public safety, and education.
Market Data | Apr 1, 2019
Nonresidential spending expands again in February
Private nonresidential spending fell 0.5% for the month and is only up 0.1% on a year-over-year basis.
Market Data | Mar 22, 2019
Construction contractors regain confidence in January 2019
Expectations for sales during the coming six-month period remained especially upbeat in January.
Market Data | Mar 21, 2019
Billings moderate in February following robust New Year
AIA’s Architecture Billings Index (ABI) score for February was 50.3, down from 55.3 in January.
Market Data | Mar 19, 2019
ABC’s Construction Backlog Indicator declines sharply in January 2019
The Construction Backlog Indicator contracted to 8.1 months during January 2019.
Market Data | Mar 15, 2019
2019 starts off with expansion in nonresidential spending
At a seasonally adjusted annualized rate, nonresidential spending totaled $762.5 billion for the month.
Market Data | Mar 14, 2019
Construction input prices rise for first time since October
Of the 11 construction subcategories, seven experienced price declines for the month.