2021 Construction Spending Up 8 Percent

Residential construction spending saw increases year-to-year in December while nonresidential construction saw dips.

Source : Flickr

February 1, 2022

Author : Alex Bustillos

While nonresidential construction spending in December was roughly equal to November, the month prior, it was down compared to December of 2020, according to an analysis of data published by the Associated General Contractors of America (AGC).

“Demand for new housing remains strong, while demand for nonresidential projects has been variable and most types of public sector investments in construction are declining,” chief economist at ABC, Ken Simonson, said.

“Contractors coping with rising materials prices and labor shortages are also dealing with the consequences of a nonresidential market that is, at best, uneven,” Simonson added.

Overall spending on construction equaled $1.64 trillion at a seasonally adjusted rate, a 0.2 percent increase over November. Overall spending was also nine percent higher in December 2021 than December 2020, AGC reports.

Meanwhile, spending for the entire year of 2021 was 8.2 percent higher than 2020.

For private residential construction, little change was seen between November and December, however it increased 9.1 percent from December 2020. It was still down year-to-year however, marking a dip of 2.3 percent from overall 2020 private residential construction spending.

More segment breakdowns, like manufacturing, power construction, warehouse and retail within the private residential construction sector are available on AGC’s website

For public construction, decreases were seen in 11 of 12 segments, marking a 1.6 percent decline from November to December and a 2.9 percent decline year-over-year. As a whole, 2021 saw a dip of 4.2 percent from 2020.

AGC says that one reason contributing to the declines in public sector construction is that much of the funds authorized by the Bipartisan Infrastructure Bill have not yet been appropriated by Congress. The organization urges Congress to make those funds available to local and state governments to “improve the nation’s aging infrastructure.”

“The Bipartisan Infrastructure Package’s immediate promise is not being met because Congress has yet to appropriate much of the increased funding,” AGC CEO Stephen E. Sandherr said. “It is time to improve our infrastructure and protect those who rely on it.”

Photo via Flickr.

Category : Federal Government Investment in Infrastructure Market Watch

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