The U.S. Census Bureau announced that construction spending during November 2021 was estimated at a seasonally adjusted annual rate of $1,625.9 billion, 0.4% (±1.0%) above the revised October estimate of $1,618.8 billion. The November figure is 9.3% (±1.2%) above the November 2020 estimate of $1,487.2 billion.
During the first 11 months of 2021, construction spending amounted to $1,463.2 billion, 7.9% (±1.0%) above the $1,355.6 billion for the same period in 2020.
In November, the estimated seasonally adjusted annual rate of public construction spending was $352.3 billion, 0.2% (±1.6%) below the revised October estimate of $353.0 billion. Highway construction was at a seasonally adjusted annual rate of $102.2 billion, 0.8% (±4.1%) below the revised October estimate of $103.0 billion, but rose 0.2% compared to November 2020. Educational construction was at a seasonally adjusted annual rate of $82.3 billion, 0.3% (±1.8%) above the revised October estimate of $82.1 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,273.6 billion, 0.6% (±0.7%) above the revised October estimate of $1,265.8 billion.
- Residential construction was at a seasonally adjusted annual rate of $796.3 billion in November, 0.9% (±1.3%) above the revised October estimate of $789.1 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $477.3 billion in November, 0.1% (±0.7%) above the revised October estimate of $476.6 billion.
“Private nonresidential spending appears to be on a solid upswing, with five consecutive months of growth, but public outlays for construction remain erratic,” said Ken Simonson, Associated General Contractors chief economist. “The public side isn’t likely to post steady gains until funds from the new infrastructure law become available and turn into actual projects.”
“Construction demand is definitely being impacted by Congress’ failure to include the funding increases it promised as part of the Bipartisan Infrastructure bill,” said Stephen E. Sandherr, the association’s chief executive officer.
“If no news is good news, then this was a fine report,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “There is little in the data for November 2021 that was earth-shattering. It is interesting to note, however, that the streak of meaningful monthly increases in nonresidential construction spending effectively ended in November, strongly suggesting that supply chain issues and worker shortages continue to constrain the pace of recovery in nonresidential construction (the same issues that continue to suppress contractor margins, according to ABC’s Construction Confidence Index).
“While the monthly data is overall not jarring, the year-over-year numbers are more noteworthy,” said Basu. “After declining during much of the pandemic, spending in the office segment has stabilized and is up 3.3% from a year ago. That may reflect data center construction spending more than traditional office space construction, however.
“Among all segments, the one experiencing the largest year-over-year decline is public safety,” said Basu. “During the pandemic’s early stages, spending in this category grew rapidly as America prepared for a public health crisis. That dynamic reversed itself in 2021. The other category suffering a major decline in construction spending over the past year is lodging.
“With business travel still slow to return and the omicron variant wreaking havoc on airlines, occupancy will remain subpar for months to come, limiting the pace of construction spending recovery in this segment. The nonresidential construction category experiencing the largest year-over-year growth in spending is manufacturing, a reflection of the ongoing efforts of producers to expand supply to meet demand.”