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AGC: Construction spending up in November 2020, but gains uneven

By |  January 4, 2021

AGCA

Construction spending in November totaled $1.46 trillion, at a seasonally-adjusted annual rate, according to analysis of federal construction data by the Associated General Contractors of America (AGC).

The $1.46 trillion marks a 0.9 percent increase from October, and a 3.8 percent uptick from November 2019, AGC says.

Despite the upswing, construction spending in November was a tale of two industries, according to AGC. Residential construction jumped 2.6 percent for the month and 16.2 percent year-over-year, but private and public nonresidential construction dropped 0.6 percent month-over-month and 4.7 percent year-over-year.

Additionally, private nonresidential construction fell for the fifth consecutive month, dropping 0.8 percent in November, compared to the previous month, and 9.5 percent compared to November 2019.

In addition, public construction spending dropped 0.2 percent for the month but improved 3.1 percent compared to the same period in 2019.

While most nonresidential categories slumped in November, highway and street construction increased 1.8 percent while educational construction gained 0.3 percent.

“Private nonresidential construction declined for the fifth-straight month in November, while public nonresidential spending slipped for the fifth time in the past six months,” says Ken Simonson, AGC’s chief economist. “Unfortunately, our latest survey finds contractors expect the volume of projects available to bid on in 2021 will be even more meager.”

On the positive side, private residential construction improved for the sixth consecutive month – a stark contrast from most nonresidential construction categories. More specifically, single-family homebuilding gained 5.1 percent in November while residential improvements climbed 0.2 percent and multifamily construction was flat.

Given the gulf between construction segments, AGC officials continue to urge Congress to enact infrastructure investment in effort to boost the industry.

“Without additional measures to boost demand for nonresidential construction, this year is likely to be a challenging one for the industry,” says Stephen Sandherr, CEO at AGC. “The impacts of the pandemic are clearly accumulating for many construction employers.”

Zach Mentz

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