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 10, 2018
Construction costs surge in April as new tariffs and other trade measures lead to significant increases in materials prices
Association officials warn that the new tariffs and resulting price spikes have the potential to undermine benefits of tax and regulatory reform, urge administration to reconsider.
Market Data | May 7, 2018
Construction employers add 17,000 jobs in April and 257,000 for the year
Unemployment rate for construction increases slightly compared to year earlier as higher pay levels appears to be attracting people with recent construction experience back into the workforce.
Market Data | May 2, 2018
Construction employment increases in 245 metro areas between March 2017 & 2018, as trade fights & infrastructure funding shortfalls loom
Houston-The Woodlands-Sugar Land, Texas and Weirton-Steubenville, W.Va.-Ohio experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines.
Market Data | May 2, 2018
Nonresidential Construction down in March, private sector falters, public sector unchanged
February’s spending estimate was revised roughly $10 billion higher.
Market Data | Apr 30, 2018
Outlook mixed for renewable energy installations in Middle East and Africa region
Several major MEA countries are actively supporting the growth of renewable energy.
Market Data | Apr 12, 2018
Construction costs climb in March as wide range of input costs jump
Association officials urge Trump administration, congress to fund infrastructure adequately as better way to stimulate demand than tariffs that impose steep costs on contractors and project owners.
Market Data | Apr 9, 2018
Construction employers add 228,000 jobs over the year despite dip in March
Average hourly earnings increase to $29.43 in construction, topping private sector by nearly 10%; Association officials urge updating and better funding programs to train workers for construction jobs.
Market Data | Apr 4, 2018
Construction employment increases in 257 metro areas between February 2017 & 2018 as construction firms continue to expand amid strong demand
Riverside-San Bernardino-Ontario, Calif. and Merced, Calif. experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines in construction employment.
Market Data | Apr 2, 2018
Construction spending in February inches up from January
Association officials urge federal, state and local officials to work quickly to put recently enacted funding increases to work to improve aging and over-burdened infrastructure, offset public-sector spending drops.
Market Data | Mar 29, 2018
AIA and the University of Minnesota partner to develop Guides for Equitable Practice
The Guides for Equitable Practice will be developed and implemented in three phase.