Total construction spending was flat between July and August, as a decrease in nonresidential projects offset continuing gains in residential construction, according to a new analysis of federal construction spending data the Associated General Contractors of America released October 1.
“Nearly every nonresidential spending segment has deteriorated from already inadequate 2020 levels in the first two-thirds of this year,” said Ken Simonson, the association’s chief economist. “Meanwhile, soaring materials costs mean that fixed public budgets buy even less infrastructure than before.”
Construction spending in August totaled $1.58 trillion at a seasonally adjusted annual rate, virtually unchanged from July. Year-to-date spending increased 7.0 percent from the total for January-August 2020. Gains were limited to residential construction, while nonresidential construction spending slipped in August and year-to-date. The residential construction segment climbed 0.4 percent for the month and 26 percent year-to-date. Combined private and public nonresidential construction spending dropped 0.4 percent compared to July and 6.7 percent over the first eight months of 2021 compared to same interval in 2020.
Education construction slumped 10.6 percent. Commercial construction–comprising warehouse, retail, and farm structures–dipped 1.7 percent. Office spending fell 10.1 percent and manufacturing construction edged down 0.8 percent.