Demand for different types of construction continued to diverge in June as residential construction increased for the month and the year while nonresidential construction spending fell again, according to a new analysis of federal construction spending data the Associated General Contractors of America released today. Officials noted the nonresidential declines include a steep drop in spending on highway and street projects and urged Congress to quickly pass a new, bipartisan infrastructure measure.
“The pandemic has created a tale of two construction industries, a residential market where demand continues to surge and a nonresidential market that is struggling to gain traction,” said Stephen E. Sandherr, the association’s chief executive officer. “The federal government has a real opportunity to boost nonresidential construction by passing the bipartisan infrastructure measure as quickly as possible.”
Construction spending in June totaled $1.55 trillion at a seasonally adjusted annual rate, an increase of 0.1% from May, and 8.2% higher than the pandemic-depressed rate in June 2020. Once again, residential construction saw monthly and year-over-year gains while non-residential construction spending lagged. The residential construction segment climbed 1.1% for the month and 28.8% year-over-year. The nonresidential construction segment fell by 0.9% compared to May and 6.6% compared to June 2020.
Private nonresidential construction spending fell 0.7% from May to June and 6.0% since June 2020, with year-over-year decreases in all 11 subsegments. The largest private nonresidential category, power construction, fell 1.9% year-over-year and 1.2% from May to June. Among the other large private nonresidential project types, commercial construction—comprising retail, warehouse and farm structures—retreated 2.1% year-over-year and 0.2% for the month. Manufacturing construction fell 0.7% from a year earlier and 1.1% from May. Office construction decreased 9.1% year-over-year and by 0.1% compared to May.
Public construction spending plunged 7.5% year-over-year and 1.2% for the month. Among the largest segments, highway and street construction declined 7.6% from a year earlier and 5.3% compared to May 2021. Public educational construction decreased 9.1% year-over-year and 0.8% in June. Spending on transportation facilities fell 5.7% over 12 months but was up 1.1% in June.
Association officials said the new bipartisan infrastructure measure would invest more than $1.2 trillion to build the nation’s roads, bridges, transit systems, airports, ports, and waterways, drinking water and wastewater systems, energy infrastructure and more. They added that Congress should pass the measure as quickly as possible to have the broadest impact on creating new construction career opportunities.
“It would be a shame if certain members of Congress were to hold new infrastructure investments, and the job opportunities they create, hostage to impose unrelated partisan measures that would undermine the economic recovery,” Sandherr said.
Related Stories
Market Data | Jan 27, 2020
U.S. hotel construction pipeline finishes 2019 trending upward
Projects under construction continue to rise reaching an all-time high of 1,768 projects.
Market Data | Jan 24, 2020
U.S. Green Building Council releases the top 10 states for LEED
Colorado leads the nation, showing how LEED green buildings support climate action and a better quality of life.
Market Data | Jan 23, 2020
Construction contractor confidence surges into 2020, says ABC
Confidence among U.S. construction industry leaders increased in November 2019 with respect to sales, profit margins, and staffing, according to the Associated Builders and Contractors Construction Confidence Index.
Market Data | Jan 22, 2020
Architecture Billings Index ends year on positive note
AIA’s Architecture Billings Index (ABI) score of 52.5 for December reflects an increase in design services provided by U.S. architecture firms.
AEC Tech | Jan 16, 2020
EC firms with a clear ‘digital roadmap’ should excel in 2020
Deloitte, in new report, lays out a risk mitigation strategy that relies on tech.
Market Data | Jan 13, 2020
Construction employment increases by 20,000 in December and 151,000 in 2019
Survey finds optimism about 2020 along with even tighter labor supply as construction unemployment sets record December low.
Market Data | Jan 10, 2020
North America’s office market should enjoy continued expansion in 2020
Brokers and analysts at two major CRE firms observe that tenants are taking longer to make lease decisions.
Market Data | Dec 17, 2019
Architecture Billings Index continues to show modest growth
AIA’s Architecture Billings Index (ABI) score of 51.9 for November reflects an increase in design services provided by U.S. architecture firms.
Market Data | Dec 12, 2019
2019 sets new record for supertall building completion
Overall, the number of completed buildings of at least 200 meters in 2019 declined by 13.7%.
Market Data | Dec 4, 2019
Nonresidential construction spending falls in October
Private nonresidential spending fell 1.2% on a monthly basis and is down 4.3% from October 2018.