 reports that construction spending increased 0.4 percent in October and is up 5 percent over the last 12 months.){kind=link}
Construction spending increased 0.4 percent from September to October as a pickup in single- and multifamily residential construction outweighed declines in public projects and mixed results for private nonresidential categories, according to an Associated General Contractors of America (AGC) analysis of government data.
Association officials say construction has yet to begin on many federally funded projects amid lengthy regulatory reviews.
“Despite a flurry of project announcements by the federal government, much of the money still has not been awarded in construction contracts, let alone work underway,” says Ken Simonson, AGC’s chief economist. “At the same time, major private categories are growing more slowly or shrinking.”
Construction spending totaled $2.174 trillion at a seasonally adjusted annual rate in October. That figure is 0.4 percent above the upwardly revised September rate and 5 percent above the October 2023 level.
Spending by sector
Private residential spending increased 1.5 percent in October and 6.4 percent year over year.
Single-family homebuilding rose 0.8 percent and 1.3 percent, respectively. Multifamily construction increased 0.2 percent in October but declined 6.8 percent compared to a year earlier. Spending by homeowners on additions and renovations jumped 2.7 percent for the month and 18.5 percent from October 2023.
Public construction spending declined 0.5 percent for the month but rose 4.5 percent over 12 months.
Among the top three segments, highway and street construction slipped 0.7 percent and 1.2 percent year over year, education construction dipped 0.4 percent for the month but rose 0.6 percent compared to October 2023, and transportation spending fell 0.1 percent in October but increased 5.4 percent over the last 12 months.
Private nonresidential spending slipped 0.3 percent for the month but posted a 3.5 percent year-over-year gain.
Of the three largest segments, manufacturing construction was unchanged from September but 16.3 percent higher than in October 2023. Power construction rose 0.2 percent for the month and 5.3 percent year over year. Commercial construction (including warehouse, retail and farm), fell 1.1 percent for the month and 11.2 percent compared to last year.
Looking ahead
Association officials urge the incoming Trump administration and Congress to explore ways to accelerate federal permitting reviews for infrastructure and construction projects.
They also urge the new administration to give federal agencies greater flexibility in complying with new Buy America rules. For example, agencies need to be able to provide waivers when no domestically produced materials are available.
“There is no reason the federal government can’t hold projects to [the] same high standards and still complete required reviews in months, instead of years,” says Jeffrey Shoaf, AGC’s CEO. “Cutting federal review times and giving agencies more flexibility will help get more construction projects started.”