Total construction spending was flat between July and August, as a decrease in nonresidential projects offset continuing gains in residential construction, 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 approve the bipartisan infrastructure bill that passed in the Senate earlier this year, noting that spending on infrastructure in the first eight months of 2021 declined from year-earlier levels.
“Nearly every nonresidential spending segment has deteriorated from already inadequate 2020 levels in the first two-thirds of this year,” said Ken Simonson, the association’s chief economist. “Meanwhile, soaring materials costs mean that fixed public budgets buy even less infrastructure than before.”
Construction spending in August totaled $1.58 trillion at a seasonally adjusted annual rate, virtually unchanged from July. Year-to-date spending increased 7.0% from the total for January-August 2020. Gains were limited to residential construction, while nonresidential construction spending slipped in August and year-to-date. The residential construction segment climbed 0.4% for the month and 26% year-to-date. Combined private and public nonresidential construction spending dropped 0.4% compared to July and 6.7% over the first eight months of 2021 compared to same interval in 2020.
Most infrastructure categories posted significant year-to-date declines, Simonson pointed out. The largest public infrastructure segment, highway and street construction, was 3.4% lower than in January-August 2020. Spending on public transportation construction slumped 6.5% year-to-date. Investment in sewage and waste disposal structures climbed 3.8%, while funding for public water supply projects slid 1.8% and conservation and development construction plunged 18%.
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 3.6%. Education construction slumped 10.6%. Commercial construction--comprising warehouse, retail, and farm structures--dipped 1.7%. Office spending fell 10.1% and manufacturing construction edged down 0.8%.
Association officials said the nearly universal decline in infrastructure spending demonstrates the urgency of enacting expanded funding for a range of infrastructure project types. They called on the House of Representatives to quickly pass the Bipartisan Infrastructure bill that already passed in the Senate by a wide margin.
“This legislation includes the kind of policy priorities that members of both parties have long claimed to support,” said Stephen E. Sandherr, the association’s chief executive officer. “There is no excuse for holding these projects hostage while sorting out other priorities. Construction workers, businesses, and the public are all losing from delay in passing this legislation.”
Related Stories
Data Centers | Apr 14, 2023
JLL's data center outlook: Cloud computing, AI driving exponential growth for data center industry
According to JLL’s new Global Data Center Outlook, the mass adoption of cloud computing and artificial intelligence (AI) is driving exponential growth for the data center industry, with hyperscale and edge computing leading investor demand.
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Higher Education | Apr 13, 2023
Higher education construction costs for 2023
Fresh data from Gordian breaks down the average cost per square foot for a two-story college classroom building across 10 U.S. cities.
Market Data | Apr 13, 2023
Construction input prices down year-over-year for first time since August 2020
Construction input prices increased 0.2% in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices rose 0.4% for the month.
Market Data | Apr 11, 2023
Construction crane count reaches all-time high in Q1 2023
Toronto, Seattle, Los Angeles, and Denver top the list of U.S/Canadian cities with the greatest number of fixed cranes on construction sites, according to Rider Levett Bucknall's RLB Crane Index for North America for Q1 2023.
Contractors | Apr 11, 2023
The average U.S. contractor has 8.7 months worth of construction work in the pipeline, as of March 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.7 months in March, according to an ABC member survey conducted March 20 to April 3. The reading is 0.4 months higher than in March 2022.
Market Data | Apr 6, 2023
JLL’s 2023 Construction Outlook foresees growth tempered by cost increases
The easing of supply chain snags for some product categories, and the dispensing with global COVID measures, have returned the North American construction sector to a sense of normal. However, that return is proving to be complicated, with the construction industry remaining exceptionally busy at a time when labor and materials cost inflation continues to put pricing pressure on projects, leading to caution in anticipation of a possible downturn. That’s the prognosis of JLL’s just-released 2023 U.S. and Canada Construction Outlook.
Market Data | Apr 4, 2023
Nonresidential construction spending up 0.4% in February 2023
National nonresidential construction spending increased 0.4% in February, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $982.2 billion for the month, up 16.8% from the previous year.
Multifamily Housing | Mar 24, 2023
Average size of new apartments dropped sharply in 2022
The average size of new apartments in 2022 dropped sharply in 2022, as tracked by RentCafe. Across the U.S., the average new apartment size was 887 sf, down 30 sf from 2021, which was the largest year-over-year decrease.
Multifamily Housing | Mar 14, 2023
Multifamily housing rent rates remain flat in February 2023
Multifamily housing asking rents remained the same for a second straight month in February 2023, at a national average rate of $1,702, according to the new National Multifamily Report from Yardi Matrix. As the economy continues to adjust in the post-pandemic period, year-over-year growth continued its ongoing decline.