November’s spending increased both in comparison to October and to a year earlier as gains in private residential and non-residential projects outweighed decreases in public spending, according to a new analysis of federal data carried out by Associated General Contractors (AGC) of America.
Officials of the trade body called on Congress to be prompt in enacting funding to fulfil promises for the wide range of highway, transportation and other public sector projects included in recent bipartisan infrastructure bill.
AGC officials said that public sector investments were down in part because Congress has failed to provide funding so far for the bipartisan infrastructure bill enacted last year. As a result, the economic benefits from that measure will be delayed for at least a few months until Congress passes a new spending bill.
“Private non-residential spending appears to be on a solid upswing, with five consecutive months of growth, but public outlays for construction remain erratic,” said Ken Simonson, the 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 totalled US$1.63 trillion at a seasonally adjusted annual rate, 0.4% above the October rate and 9.3% higher than in November 2020. Year-to-date spending in the first 11 months of 2021 combined increased 7.9% from the total for January-November 2020.
Private construction spending rose 0.6% in November from the October total and 12.5% from November 2020. In contrast, public construction spending slipped 0.2% for the month and 0.9% year-on-year.
There were gains in both residential and non-residential private construction. Spending on new single- and multifamily residential projects, along with additions and renovations to existing houses, increased 0.9% for the month and 16.3% from a year earlier. Private non-residential spending edged up 0.1% from October and 6.7% from November 2020. The largest private non-residential segment, power construction, rose 0.1% for the month and 7.5% year-over-year. Among other large segments, commercial construction--comprising warehouse, retail, and farm structures--dipped 0.1% in November but jumped 15.1% year-over-year. Manufacturing construction increased for the 11th month in a row, by 0.9%, putting the total 22.4% above the year-earlier level.
The largest public categories posted mixed results. Highway and street construction slid 0.8% from October but rose 0.2% compared to November 2020. Educational construction climbed 0.3% for the month but declined 6.3% year-over-year. Transportation spending fell 0.5% in November but rose 0.7% from the year-earlier total.
“Construction demand is definitely being impacted by Congress’ failure to include the funding increases it promised as part of the Bipartisan Infrastructure Bill,” said Stephen Sandherr, AGC’s chief executive officer.
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