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
Market Data | Feb 23, 2021
Architectural billings continue to contract in 2021
AIA’s Architecture Billings Index (ABI) score for January was 44.9 compared to 42.3 in December.
Healthcare Facilities | Feb 18, 2021
The Weekly show, Feb 18, 2021: What patients want from healthcare facilities, and Post-COVID retail trends
This week on The Weekly show, BD+C editors speak with AEC industry leaders from JLL and Landini Associates about what patients want from healthcare facilities, based on JLL's recent survey of 4,015 patients, and making online sales work for a retail sector recovery.
Market Data | Feb 17, 2021
Soaring prices and delivery delays for lumber and steel squeeze finances for construction firms already hit by pandemic
Association officials call for removing tariffs on key materials to provide immediate relief for hard-hit contractors and exploring ways to expand long-term capacity for steel, lumber and other materials,
Market Data | Feb 9, 2021
Construction Backlog and contractor optimism rise to start 2021, according to ABC member survey
Despite the monthly uptick, backlog is 0.9 months lower than in January 2020.
Market Data | Feb 9, 2021
USGBC top 10 states for LEED in 2020
The Top 10 States for LEED green building is based on gross square feet of certified space per person using 2010 U.S. Census data and includes commercial and institutional projects certified in 2020.
Market Data | Feb 8, 2021
Construction employment stalls in January with unemployment rate of 9.4%
New measures threaten to undermine recovery.
Market Data | Feb 4, 2021
Construction employment declined in 2020 in majority of metro areas
Houston-The Woodlands-Sugar Land and Brockton-Bridgewater-Easton, Mass. have worst 2020 losses, while Indianapolis-Carmel-Anderson, Ind. and Walla Walla, Wash. register largest gains in industry jobs.
Market Data | Feb 3, 2021
Construction spending diverges in December with slump in private nonresidential sector, mixed public work, and boom in homebuilding
Demand for nonresidential construction and public works will decline amid ongoing pandemic concerns.
Market Data | Feb 1, 2021
The New York City market is back on top and leads the U.S. hotel construction pipeline
New York City has the greatest number of projects under construction with 108 projects/19,439 rooms.
Market Data | Jan 29, 2021
Multifamily housing construction outlook soars in late 2020
Exceeds pre-COVID levels, reaching highest mark since 1st quarter 2018.