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
Market Data | Mar 16, 2020
Grumman/Butkus Associates publishes 2019 edition of Hospital Benchmarking Survey
Report examines electricity, fossil fuel, water/sewer, and carbon footprint.
Market Data | Mar 12, 2020
New study from FMI and Autodesk finds construction organizations with the highest levels of trust perform twice as well on crucial business metrics
Higher levels of trust within organizations and across project teams correlate with increased profit margins, employee retention and repeat business that can all add up to millions of dollars of profitability annually.
Market Data | Mar 11, 2020
The global hotel construction pipeline hits record high at 2019 year-end
Projects currently under construction stand at a record 991 projects with 224,354 rooms.
Market Data | Mar 6, 2020
Construction employment increases by 43,000 in February and 223,000 over 12 months
Average hourly earnings in construction top private sector average by 9.9% as construction firms continue to boost pay and benefits in effort to attract and retain qualified hourly craft workers.
Market Data | Mar 4, 2020
Nonresidential construction spending attains all-time high in January
Private nonresidential spending rose 0.8% on a monthly basis and is up 0.5% compared to the same time last year.
Market Data | Feb 21, 2020
Construction contractor confidence remains steady
70% of contractors expect their sales to increase over the first half of 2020.
Market Data | Feb 20, 2020
U.S. multifamily market gains despite seasonal lull
The economy’s steady growth buoys prospects for continued strong performance.
Market Data | Feb 19, 2020
Architecture billings continue growth into 2020
Demand for design services increases across all building sectors.
Market Data | Feb 5, 2020
Construction employment increases in 211 out of 358 metro areas from December 2018 to 2019
Dallas-Plano-Irving, Texas and Kansas City have largest gains; New York City and Fairbanks, Alaska lag the most as labor shortages likely kept firms in many areas from adding even more workers.
Market Data | Feb 4, 2020
Construction spending dips in December as nonresidential losses offset housing pickup
Homebuilding strengthens but infrastructure and other nonresidential spending fades in recent months, reversing pattern in early 2019.
