Construction spending during July 2021 was estimated at a seasonally adjusted annual rate of $1,568.8 billion, 0.3% (±1.2%) above the revised June estimate of $1,563.4 billion. The July figure is 9.0% (±1.5%) above the July 2020 estimate of $1,439.6 billion.
During the first seven months of this year, construction spending amounted to $883.2 billion, 6.2% (±1.0%) above the $831.5 billion for the same period in 2020.
In July, the estimated seasonally adjusted annual rate of public construction spending was $337.8 billion, 0.7% (±2.1%) above the revised June estimate of $335.6 billion. Educational construction was at a seasonally adjusted annual rate of $79.7 billion, 0.5% (±2.3%) below the revised June estimate of $80.1 billion. Highway construction was at a seasonally adjusted annual rate of $94.5 billion, 1.9% (±6.4%) above the revised June estimate of $92.7 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,231.0 billion, 0.3% (±0.7%) above the revised June estimate of $1,227.8 billion.
- Residential construction was at a seasonally adjusted annual rate of $773.0 billion in July, 0.5% (±1.3%) above the revised June estimate of $768.9 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $458.0 billion in July, 0.2% (±0.7%) below the revised June estimate of $458.9 billion.
“The nonresidential construction spending numbers are meaningfully worse than they initially appear,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “While the headline number suggests that nonresidential spending was effectively flat in July, the figure does not adjust for inflation. In real terms, the volume of construction services delivered by the nation’s nonresidential contractors declined in July.
“Higher materials prices and worsening skills shortages represent primary culprits,” said Basu. “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,” said Basu. “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 and office segments, and neither of these segments exhibited a rebirth of momentum in July.”