Construction Spending Hits $1.8T

September registered $1.8 trillion in construction spending, up 0.2 percent over August and up 10.9 percent year to date, according to the Association of General Contractors. Nonresidential construction now outpaces residential, the group said. Public spending has lagged other segments, which the group blamed on regulatory requirements.

“Demand remains strong for a range of nonresidential construction segments despite supply chain challenges and rising interest rates,” said Stephen E. Sandherr, CEO, in a prepared statement. “But transportation infrastructure investments would likely have been higher if it wasn’t for the inevitable regulatory confusion that comes with the new Buy America requirements.”

Construction spending, not adjusted for inflation, totaled $1.8 trillion at a seasonally adjusted annual rate in September. Spending on private residential construction was flat in September but is still up 12.7 percent compared to a year ago. Spending on private nonresidential construction is up 1.0 percent in September and 10.5 percent for the year.

The biggest drivers for the increase in private nonresidential construction were manufacturing construction, which was up 7.6 percent for the month and 43.3 percent for the year; commercial construction, which was down 0.7 percent for the month but is up 22.6 percent for the year; and lodging construction, which was up 0.7 percent in September and 15.8 percent for the year. Private sector power construction continued to decline, down 0.4 percent for the month and 12.9 percent for the year.

Public construction spending decreased by 0.4 percent in September, with mixed results for the three largest segments. Highway and street construction spending was up 1.7 percent for the month and 8.7 percent for the year, while educational spending was flat for the month and down 1.0 percent for the year. Transportation construction spending decreased by 1.3 percent for the month but was up 3.2 percent for the year.

Source: AGC