Nonresidential and Multifamily Construction Spending Slump in March

Spending on most categories of nonresidential and multifamily construction declined from February to March as contractors struggled to find enough workers and get timely deliveries of materials, according to an analysis the Associated General Contractors of America released May 2 regarding federal spending data.

“Contractors continue to report strong demand for most types of structures, with few owners canceling or postponing planned projects,” said Ken Simonson, the association’s chief economist. “But worker shortages and supply-chain problems, from lockdowns in China to the war in Ukraine, are slowing project completions.”

Construction spending in March totaled $1.73 trillion at a seasonally adjusted annual rate, 0.1 percent above the upwardly revised February rate and 11.7 percent higher than in March 2021. Private residential construction spending accounted for all of the increase in the latest month, rising 1.0 percent for the month and 18.4 percent from March 2021. In contrast, private nonresidential construction spending slumped 1.2 percent from February, although the March total was 8.5 percent higher than in March 2021. Public construction spending slipped 0.2 percent for the month but increased 1.7 percent from the year-ago level.

Among residential segments, single-family construction added 1.3 percent over the February total and 19.4 percent year-over-year. Multifamily construction fell 0.5 percent in March but rose 3.9 percent from a year earlier. Spending on improvements to existing owner-occupied houses increased 1.1 percent for the month and 22.5 percent year-over-year.

Commercial construction, skidded 1.9 percent in March but gained 15.5 percent year-over-year. Manufacturing construction fell 1.6 percent in March but topped the March 2021 rate by 31.8 percent. Educational construction tumbled 0.8 percent for the month and 6.2 percent year-over-year.

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