Declines in public construction and single-family outweighed gains in private nonresidential construction in February, leading to an overall 0.1-percent decrease in total construction spending compared to January, according to the Associated General Contractors of America.
Highway and street spending increased 0.3 percent.
February spending totaled $1.8 billion for the month. Spending on private residential construction decreased for the ninth consecutive month in February, by 0.6 percent. Spending on private nonresidential construction increased by 0.7 percent in February, and public construction investment dipped by 0.2 percent.
“Continued strong demand for manufacturing plants and data centers, along with an increase in power projects, contributed to the increase in private nonresidential construction,” said Ken Simonson, chief economist, in a statement. “Those segments appear likely to keep growing for many months to come.”
Spending varied among large private nonresidential segments. The biggest component, manufacturing plants, jumped 2.7 percent. Commercial construction—comprising warehouse, retail, and farm construction—decreased 0.6 percent in February. Power construction climbed 1.5 percent. Spending on private office construction, including data centers, rose 0.5 percent.
The largest public categories were mixed, as well. The biggest, highway and street construction, increased 0.3 percent, and education construction slumped 0.9 percent. Public spending on transportation projects fell 0.7 percent.
Residential spending shrank due to a 1.8 percent contraction from January in single-family homebuilding. That outweighed an increase of 1.4 percent in multifamily construction.
Association officials said many projects were being held up by a lack of clear guidance about new regulatory measures associated with much of the new federal investments in construction. Confusion about the administration’s approach to Buy America rules, labor measures associated with the new semiconductor funding, and registered apprenticeship mandates for the new green energy investments were either unclear or unfinished.
“The president and his team appear far more focused on interpreting laws to fit their agenda instead of progress when it comes to the billions in new federal investments Congress has authorized,” said Stephen E. Sandherr, CEO.
Source: AGC
