Nonresidential construction spending rose 0.1% from June to July and is down 4.2% compared with July 2021, according to www.abc.org.
For public construction, spending increased 0.6% for the month and is down 5.1% year-to-date. Private nonresidential spending fell 0.2% from June to July and is down 3.6% year-to-date.
Associated Builders and Contractors Chief Economist Anirban Basu said the construction spending numbers are worse than they initially seem as they do not adjust for inflation. He noted “in real terms,” the volume of construction services in the U.S. declined in July.
“Higher materials prices and worsening skills shortages represent primary culprits,” Basu said. “Many project owners are delaying projects due to elevated construction service delivery costs. With COVID-19 continuing to wreak havoc on supply chains, materials prices and transportation costs are set to remain elevated well into 2022. The result is that the construction recovery is significantly slower than it would otherwise be, a fact reflected in the most recent reading from ABC’s Construction Backlog Indicator.
“Data indicate that public construction spending has been more negatively affected than private spending,” Basu continued. “While overall nonresidential construction spending is down 4% on a year-over-year basis, public construction spending is down more than 5%. That said, there are some private segments that continue to exhibit weakness, due in part to behavioral shifts that have transpired during the public health crisis. Spending is down year over year in the lodging, office and commercial segments, and none of these segments exhibited a rebirth of momentum in July.”
