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
Building Team | Sep 6, 2016
Letting your resource take center stage: A guide to thoughtful site selection for interpretive centers
Thoughtful site selection is never about one factor, but rather a confluence of several components that ultimately present trade-offs for the owner.
Market Data | Sep 2, 2016
Nonresidential spending inches lower in July while June data is upwardly revised to eight-year record
Nonresidential construction spending has been suppressed over the last year or so with the primary factor being the lack of momentum in public spending.
Industry Research | Sep 1, 2016
CannonDesign releases infographic to better help universities obtain more R&D funding
CannonDesign releases infographic to better help universities obtain more R&D funding.
Industry Research | Aug 25, 2016
Building bonds: The role of 'trusted advisor' is earned not acquired
A trusted advisor acts as a guiding partner over the full course of a professional relationship.
Multifamily Housing | Aug 17, 2016
A new research platform launches for a data-deprived multifamily sector
The list of leading developers, owners, and property managers that are funding the NMHC Research Foundation speaks to the information gap it hopes to fill.
Hotel Facilities | Aug 17, 2016
Hotel construction continues to flourish in major cities
But concerns about overbuilding persist.
Market Data | Aug 16, 2016
Leading economists predict construction industry growth through 2017
The Chief Economists for ABC, AIA, and NAHB all see the construction industry continuing to expand over the next year and a half.
Multifamily Housing | Aug 12, 2016
Apartment completions in largest metros on pace to increase by 50% in 2016
Texas is leading this multifamily construction boom, according to latest RENTCafé estimates.
Market Data | Jul 29, 2016
ABC: Output expands, but nonresidential fixed investment falters
Nonresidential fixed investment fell for a third consecutive quarter, as indicated by Bureau of Economic Analysis data.
Industry Research | Jul 26, 2016
AIA consensus forecast sees construction spending on rise through next year
But several factors could make the industry downshift.