Nonresidential construction spending fell 0.5 percent in April, the fifth straight month of decline and a two-year low, according to analysis by the Associated General Contractors of America. The group cited declining demand in several project categories and blamed “lengthening production and delivery times for materials, along with fast-rising prices for many items.”
Combined private and public nonresidential spending declined 0.5 percent from March and 3.9 percent over 12 months, to the lowest annual rate since December 2018.
Among the other large private nonresidential project types, commercial construction—comprising retail, warehouse and farm structures—retreated 1.3 percent year-over-year despite a gain of 0.4 percent for the month. Manufacturing construction rose 0.6 percent from a year earlier and 0.4 percent from March. Office construction decreased 1.6 percent year-over-year but edged up 0.2 percent in April.
Public construction spending slipped 2.2 percent year-over-year and 0.6 percent for the month. Among the largest segments, highway and street construction declined 2.7 percent from a year earlier, although spending rose 0.6 percent for the month. Public educational construction decreased 4.0 percent year-over-year and 0.5 percent in April. Spending on transportation facilities fell 1.9 percent over 12 months and 1.2 percent in April.
“Both public and private nonresidential spending overall continued to shrink in April, despite a pickup in a few spending categories from March,” said Ken Simonson, the association’s chief economist, in a prepared statement. “Ever-growing delays and uncertainty regarding backlogs and delivery times for key materials, as well as shortages and record prices, are likely to make even more project owners hesitant to commit to new work.”
Construction spending in April totaled $1.52 trillion at a seasonally adjusted annual rate, an increase of 0.2 percent from the pace in March and 9.8 percent higher than the pandemic-depressed rate in April 2020. As has been true for the past several months, the year-over-year gain was limited to residential construction, Simonson said. That segment climbed 1.0 percent for the month and 29.5 percent year-over-year.
Source: AGC
