Total construction spending declined in September for the first time since February, as both residential and nonresidential construction slipped, according to a new analysis of federal construction spending data released by the Associated General Contractors of America (AGC).
“Spending on projects has been slowed by shortages of workers and materials, as well as extended or uncertain delivery times,” said Ken Simonson, the association’s chief economist. “And the extreme rise in materials costs is likely to mean some infrastructure projects will no longer be affordable without additional funding.”
Construction spending in September totaled $1.57 trillion at a seasonally adjusted annual rate, down 0.5 percent from August. Year-to-date spending in the first nine months of 2021 combined increased 7.1 percent from the total for January-September 2020. While both residential and nonresidential construction declined from August to September, the two categories have diverged relative to 2020 levels.
Residential construction spending slipped 0.4 percent for the month but was 24.5 percent higher year-to-date. Combined private and public nonresidential construction spending decreased 0.6 percent in September and 5.8 percent year-to-date.
Education construction slumped 10.1 percent. Commercial construction – comprising warehouse, retail, and farm structures – dipped 1.7 percent, as a 13.2 percent plunge in retail construction outweighed a 12.0 percent hike in warehouse structures. Office spending fell 9.2 percent and manufacturing construction inched down 0.2 percent.