The U.S. Census Bureau announced that construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, 0.2% (±0.8%) above the revised February estimate of $1,509.9 billion. The March figure is 5.3% (±1.0%) above the March 2020 estimate of $1,436.7 billion.
During the first three months of this year, construction spending amounted to $328.3 billion, 4.5% (±1.0%) above the $314.1 billion for the same period in 2020.
In March, the estimated seasonally adjusted annual rate of public construction spending was $343.9 billion, 1.5% (±1.3%) below the revised February estimate of $349.0 billion. Highway construction was at a seasonally adjusted annual rate of $98.8 billion, 2.2% (±4.4%) below the revised February estimate of $101.1 billion. Educational construction was at a seasonally adjusted annual rate of $85.3 billion, 2.0% (±2.5%) below the revised February estimate of $87.1 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,169.2 billion, 0.7% (±0.7%) above the revised February estimate of $1,160.9 billion.
- Residential construction was at a seasonally adjusted annual rate of $725.2 billion in March, 1.7% (±1.3%) above the revised February estimate of $713.1 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $444.0 billion in March, 0.9% (±0.7%) below the revised February estimate of $447.8 billion.
“While the longer-term outlook for nonresidential construction is superb, the pandemic is lingering, creating much damage to commercial real estate fundamentals,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “The lodging, office and commercial segments experienced declines in spending in March. Office vacancy rates are elevated in many markets, and the industry experienced negative net absorption. The trials and tribulations of hotel operators, retailers and restauranteurs are also well known. Private nonresidential construction spending is down more than 9% from March 2020.
“Public construction spending was weak in March and is down more than 5% on a year-over-year basis,” said Basu. “While large-scale federal infrastructure outlays are likely in the future, that money has yet to arrive. State and local government finances have generally held up far better than many had predicted earlier in the COVID-19 crisis, but many governments have had to spend significant operational sums to countervail the public health crisis and therefore had to redirect money away from infrastructure.
“ABC’s Construction Backlog Indicator has foreshadowed this state of affairs for months,” said Basu. “The most recent readings suggest that the construction spending recovery will be slow over the near-term. However, as the broader economic recovery picks up additional speed later this year with more pervasive vaccinations and re-openings, both private and public construction spending should begin to manifest more positive momentum later this year and into 2022.”