Construction Spending Posts Small Increase In July, According To AGC
Alexandria, VA - Total construction spending ticked up from June to July, as gains in residential and public construction offset a dip in private nonresidential projects, according to a new analysis of federal construction spending data the Associated
General Contractors of America. Officials noted, however, that challenges remain for the industry, particularly because of continuing problems with coronavirus flare-ups and supply-chain disruptions.
“Although nonresidential construction is no longer in free fall, many categories face continuing challenges,” said Ken Simonson, the association’s chief economist. “The rapid spread of the delta variant of COVID-19 is causing a
pullback in re-openings and travel that may lead some owners to postpone new projects. Meanwhile, materials price increases, limited supplies of key materials, and long or uncertain delivery times are impeding the industry’s recovery.”
Construction spending in July totaled $1.57 trillion at a seasonally adjusted annual rate, an increase of 0.3 percent from June, and 9.0 percent higher than the pandemic-depressed rate in July 2020. Once again, residential construction saw monthly and
year-over-year gains, while nonresidential construction spending posted mixed results. The residential construction segment climbed 0.5 percent for the month and 26.5 percent year-over-year. Combined private and public nonresidential construction
spending inched up 0.1 percent compared to June but declined 4.2 percent compared to July 2020.
Private nonresidential construction spending fell 0.2 percent from June to July and 3.6 percent since July 2020. The largest private nonresidential category, power construction, decreased by 0.7 percent from June to July and 0.9 percent year-over-year.
Among the other large private nonresidential project types, commercial construction—comprising retail, warehouse and farm structures—was essentially unchanged for the second month in a row but higher than in July 2020 by 4.6 percent. Manufacturing
construction spending was also nearly unchanged for the month and up 1.8 percent from a year earlier. Office construction decreased 0.1 percent compared to June and 6.1 percent year-over-year.
Public construction spending increased 0.7 percent for the month but was 5.1 percent lower year-over-year. Among the largest segments, highway and street construction gained 1.9 percent compared to June but dipped 0.1 percent over 12 months. Public educational
construction fell 0.5 percent in July and 6.4 percent year-over-year. Spending on transportation facilities was up 0.3 percent from June but fell 4.2 percent from July 2020.
"We are starting to get a more complete picture of how the resurgent coronavirus and policy responses to it are impacting the construction industry,” said Stephen E. Sandherr, the association’s chief executive officer. “The industry
will not be out of the woods without new federal infrastructure investments and support for workforce development.”
About The Associated General Contractors Of America
The Associated General Contractors of America (AGC) is a leading association for the construction industry. AGC represents more than 26,000 firms, including over 6,500 of America’s leading general contractors, and over 9,000 specialty-contracting firms. More than 10,500 service providers and suppliers are also associated with AGC, all through a nationwide network of chapters. To learn more, visit www.agc.org.