The U.S. Census Bureau announced that construction spending during March 2019 was estimated at a seasonally adjusted annual rate of $1,282.2 billion, 0.9% (±1.0%) below the revised February estimate of $1,293.3 billion. The March figure is 0.8% (±1.5%) below the March 2018 estimate of $1,293.1 billion.
During the first three months of this year, construction spending amounted to $277.7 billion, 0.2% (±1.3%) below the $278.3 billion for the same period in 2018.
In March, the estimated seasonally adjusted annual rate of public construction spending was $320.7 billion, 1.3% (±2.0%) below the revised February estimate of $324.7 billion.
- Highway construction was at a seasonally adjusted annual rate of $104.5 billion, 1.9% (±5.8%) below the revised February estimate of $106.5 billion.
- Educational construction was at a seasonally adjusted annual rate of $76.6 billion, 1.5% (±3.5%) below the revised February estimate of $77.8 billion.
Spending on private construction was at a seasonally adjusted annual rate of $961.5billion, 0.7% (±0.7%) below the revised February estimate of $968.6 billion.
- Residential construction was at a seasonally adjusted annual rate of $500.9 billion in March, 1.8% (±1.3%) below the revised February estimate of $510.1 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $460.6 billion in March ,0.5% (±0.7%) above the revised February estimate of $458.5 billion.
“Construction spending totaled $1.282 trillion in March, down 0.9% from February and down 0.8% from March 2018,” said Ken Simonson, Associated General Contractors of America chief economist. “However, the yearly decline was confined to single-family homebuilding, which fell by 8.4% over 12 months. At the same time, new multifamily construction spending jumped by 11%, private nonresidential spending increased by 2.1% and public construction spending rose 8.6%.”
“Though the headline number indicates that construction spending dipped in March, private nonresidential construction spending has never been higher in our nation’s history,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “What’s more, construction related to manufacturing facilities topped $70 billion on an annualized basis for the first time since December 2016. These data stand for the proposition that the nonresidential construction expansion remains firmly in place.
“Even though public nonresidential construction fell in March, there is little reason to believe this will continue,” said Basu. “State and local government finances continue to improve, positioning more communities to earmark additional resources to infrastructure outlays. In addition, there are signals coming from the federal government that it recognizes it must step up its role in order to be a catalyst for infrastructure replenishment. While it’s too soon to tell whether ongoing efforts will amount to anything significant given the absence of clearly identified funding sources, there is momentum behind the idea of increased infrastructure investment.
“With the U.S. economic expansion remaining in place and contractors enjoying plentiful backlog on average, there is little reason to be concerned about softening demand for their services for the rest of year,” said Basu. “That said, widespread human capital shortfalls will persist, and will likely expand over the course of the year as contractors plan to increase staffing, according to ABC’s Construction Confidence Index. And while more communities are now focused on strengthening and expanding apprenticeship programs, it will take time for these efforts to yield substantial results. As a result, most contractors can expect a busy year and a continuous scramble to retain and attract talent.”