Total construction spending inched up 0.2 percent in November compared to October, and is up 8.5 percent compared to November 2021, according to the Associated General Contractors of America (AGC). Total spending totaled $1.81 trillion, not adjusted for inflation.
The association said the lackluster growth was due to ongoing declines in private residential home building, down 0.5 percent in November over October and down for the sixth consecutive month. AGC officials also cited a lack of new infrastructure projects, with public spending down 0.1 percent.
“[T]he timing of public construction, while well-funded, remains unclear,” said Ken Simonson, chief economist, in a statement.
Private nonresidential spending rose 1.7 percent in November, according to AGC. Spending on manufacturing plants—the largest type—jumped 6.5 percent for the month and 43 percent compared to November 2021. Commercial construction—comprising warehouse, retail, and farm construction—was unchanged, and private power construction increased 1.2 percent from October. Private health care construction rose 0.1 percent for the month.
“A variety of private nonresidential categories, as well as multifamily projects, posted solid spending gains in November,” said Simonson. “Many of these segments should continue to do well in 2023.”
Residential spending shrank due to a 2.9 percent contraction from October in single-family homebuilding, according to AGC. That outweighed increases of 2.4 percent in multifamily construction and 1.3 percent in additions and renovations to owner-occupied houses.
The largest public segment, highway and street construction, decreased by 1.0 percent in November, according to the association. Other infrastructure categories also slipped. Spending declined 0.2 percent for transportation facilities and 2.0 percent for water supply projects. These decreases offset upticks of 0.1 percent for education construction and 0.3 percent for sewage and waste disposal construction.
Source: AGC
