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AGC: Construction spending up in November 2021

By |  January 3, 2022

AGC

Total construction starts in November 2021 saw growth from levels seen in both the month prior and a year earlier in November 2020, according to an Associated General Contractors of America (AGC) analysis of federal construction data.

This growth, AGC says, comes as gains in private residential and nonresidential projects helped to offset the decreases in public construction. AGC officials say that public sector investments are down, in part, because Congress has yet to start doling out funding from the Infrastructure Investment & Jobs Act (IIJA) passed last year.

“Private nonresidential spending appears to be on a solid upswing, with five consecutive months of growth, but public outlays for construction remain erratic,” says Ken Simonson, AGC’s chief economist. “The public side isn’t likely to post steady gains until funds from the new infrastructure law become available and turn into actual projects.”

Construction spending in November totaled $1.63 trillion at a seasonally adjusted annual rate. This is 0.4 percent higher than in October and 9.3 percent above November 2020. Spending in the first 11 months of 2021 combined was 7.9 percent higher than January to November of 2020.

Private construction grew 0.6 percent from October to November and 12.5 percent from November 2020. Conversely, public construction dropped 0.2 percent over the month and 0.9 percent year-over-year.

Both residential and nonresidential private construction saw gains.

Residential gains were driven by spending on new single- and multifamily projects, along with additions and renovations to existing houses. This spending increased 0.9 percent from October to November and 16.3 percent from November 2020.

Private nonresidential spending grew 0.1 percent over the month and 6.7 percent from a year ago. The largest private nonresidential segment, power construction, gained 0.1 percent between October and November and was 7.5 percent higher than November 2020.

Among other large segments, commercial construction – warehouses, retail and farm structures – dropped 0.1 percent in November but grew 15.1 percent year-over-year. Manufacturing construction grew for the 11th month in a row (up 0.9 percent in November), for a total yearlong growth of 22.4 percent.

The largest public categories saw mixed results. Highway and street construction fell 0.8 percent from October but grew 0.2 percent compared to November 2020. Educational construction grew 0.3 percent for the month but fell 6.3 percent year-over-year. Transportation spending dropped 0.5 percent in November but remained 0.7 percent higher than November 2020.

Stephen Sandherr, AGC’s CEO, reiterates the impact that the lack of funding from the IIJA is having on public construction.

“Construction demand is definitely being impacted by Congress’ failure to include the funding increases it promised as part of the bipartisan infrastructure bill,” Sandherr says.

Jack Kopanski

About the Author:

Jack Kopanski is the Managing Editor for Pit & Quarry and Portable Plants. Kopanski can be reached at 216-706-3756 or jkopanski@northcoastmedia.net.

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