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 | May 15, 2020
Nonresidential construction employment sees record loss in April
The construction unemployment rate was 16.6% in April, up 11.9 percentage points from the same time last year.
Market Data | May 14, 2020
5 must reads for the AEC industry today: May 14, 2020
The good news about rent might not be so good and some hotel developers consider whether to abandon projects.
Market Data | May 13, 2020
House democrats' coronavirus measure provides some relief for contractors, but lacks other steps needed to help construction
Construction official says new highway funding, employee retention credits and pension relief will help, but lack of safe harbor measure, Eextension of unemployment bonus will undermine recovery.
Market Data | May 13, 2020
5 must reads for the AEC industry today: May 13, 2020
How to design resilient libraries in a post-covid world and vacation real-estate markets are 'toast.'
Market Data | May 12, 2020
ABC’s Construction Backlog Indicator falls in April; Contractor Confidence rebounds from historic lows
Nonresidential construction backlog is down 0.4 months compared to the March 2020 ABC survey and 1.7 months from April 2019.
Market Data | May 12, 2020
6 must reads for the AEC industry today: May 12, 2020
A 13-point plan to reduce coronavirus deaths in nursing homes and Bjarke Ingels discusses building on Mars.
Market Data | May 11, 2020
Interest in eSports is booming amid COVID-19
The industry has proved largely immune to the COVID-19 pandemic due to its prompt transition into online formats and sudden spike in interest from traditional sports organizations.
Market Data | May 11, 2020
6 must reads for the AEC industry today: May 11, 2020
Nashville residential tower will rise 416 feet and the construction industry loses 975,000 jobs.
Market Data | May 8, 2020
Construction industry loses 975,000 jobs in April as new association survey shows deteriorating demand for construction projects
Association partner Procore also releases near real-time construction data measuring impacts of coronavirus as association calls for new measures.
Market Data | May 8, 2020
7 must reads for the AEC industry today: May 8, 2020
The death of the office and Colorado's first multifamily project to receive WELL Precertification.