Construction Spending Up in November
Total construction spending increased in November compared to levels in October and a year earlier, as gains in private residential and nonresidential projects outweighed decreases in public outlays, according to a new analysis of federal construction spending data the Associated General Contractors of America released today.
National nonresidential construction spending was virtually unchanged in November on a monthly basis, according to an Associated Builders and Contractors analysis. On a seasonally adjusted annualized basis, nonresidential spending totaled $820.6 billion for the month.
See more on nonresidential as well as other vocational outlooks here.
“Private nonresidential spending appears to be on a solid upswing, with five consecutive months of growth, but public outlays for construction remain erratic,” said Ken Simonson, chief economist at AGC. “The public side isn’t likely to post steady gains until funds from the new infrastructure law become available and turn into actual projects.”
Construction spending in November totaled $1.63 trillion at a seasonally adjusted annual rate, 0.4 percent above the October rate and 9.3 percent higher than in November 2020. Year-to-date spending in the first 11 months of 2021 combined increased 7.9 percent from the total for January-November 2020.
Private construction spending rose 0.6 percent in November from the October total and 12.5 percent from November 2020. In contrast, public construction spending slipped 0.2 percent for the month and 0.9 percent year-over-year.
There were gains in both residential and nonresidential private construction. Spending on new single- and multifamily residential projects, along with additions and renovations to existing houses, increased 0.9 percent for the month and 16.3 percent from a year earlier. Private nonresidential spending edged up 0.1 percent from October and 6.7 percent from November 2020. The largest private nonresidential segment, power construction, rose 0.1 percent for the month and 7.5 percent year-over-year. Among other large segments, commercial construction—comprising warehouse, retail, and farm structures—dipped 0.1 percent in November but jumped 15.1 percent year-over-year. Manufacturing construction increased for the 11th month in a row, by 0.9 percent, putting the total 22.4 percent above the year-earlier level.
The largest public categories posted mixed results. Highway and street construction slid 0.8 percent from October but rose 0.2 percent compared to November 2020. Educational construction climbed 0.3 percent for the month but declined 6.3 percent year-over-year. Transportation spending fell 0.5 percent in November but rose 0.7 percent from the year-earlier total.
Nonresidential spending analysis
Spending was up on a monthly basis in seven of the 16 nonresidential subcategories, with spending in the commercial and office subcategories unchanged. Private nonresidential spending was up 0.1 percent, while public nonresidential construction spending declined 0.1 percent in November, according to ABC.
“If no news is good news, then this was a fine report,” said Anirban Basu, ABC chief economist, in a prepared statement. “There is little in the data for November 2021 that was earth-shattering. It is interesting to note, however, that the streak of meaningful monthly increases in nonresidential construction spending effectively ended in November, strongly suggesting that supply chain issues and worker shortages continue to constrain the pace of recovery in nonresidential construction....
“While the monthly data is overall not jarring, the year-over-year numbers are more noteworthy,” said Basu. “After declining during much of the pandemic, spending in the office segment has stabilized and is up 3.3 percent from a year ago. That may reflect data center construction spending more than traditional office space construction, however.