Total construction spending during August 2022 was estimated at a seasonally adjusted annual rate of $1,781.3 billion, 0.7% (±1.0%) below the revised July estimate of $1,793.5 billion. The August figure is 8.5% (±1.6%) above the August 2021 estimate of $1,641.6 billion, according to the The U.S. Census Bureau.
During the first eight months of this year, construction spending amounted to $1,183.8 billion, 10.9% (±1.0%) above the $1,067.4 billion for the same period in 2021.
In August, the estimated seasonally adjusted annual rate of public construction spending was $355.3 billion, 0.8% (±1.8%) below the revised July estimate of $358.3 billion. Highway construction was at a seasonally adjusted annual rate of $102.0 billion, 1.4% (±4.8%) below the revised July estimate of $103.4 billion. Educational construction was at a seasonally adjusted annual rate of $77.6 billion, 0.4% (±1.8%) below the revised July estimate of $78.0 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,426.0 billion, 0.6% (±0.7%) below the revised July estimate of $1,435.2 billion.
- Residential construction was at a seasonally adjusted annual rate of $912.9 billion in August, 0.9% (±1.3%) below the revised July estimate of $921.6 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $513.1 billion in August, 0.1% (±0.7%) below the revised July estimate of $513.6 billion.
“The construction market is in a transition that is likely to accelerate in the months ahead,” said Ken Simonson, Associated General Contractors of America chief economist. “Steeply rising interest rates have crushed demand for single-family housing and threaten developer-financed projects, while newly enacted federal legislation will soon boost investment in power, manufacturing, and infrastructure construction. But a pickup in these segments will require improvements in the timely approval of projects and adequate supplies of workers and materials.”
“The disparity between high contractor confidence and worrisome macroeconomic outcomes persists,” said Associated Builders and Contractors (ABC) National Chief Economist Anirban Basu. “According to ABC’s Construction Confidence Index and Backlog Indicator, many contractors remain in expansion mode and expect to experience rising sales and profit margins going forward. Many also expect their employment levels to be higher in six months.
“But the nonresidential construction data indicate that consistent spending growth remains elusive,” said Basu. “Given the rising costs of project financing and delivering construction services, that is not surprising. Arguably, it is contractor confidence that is counterintuitive.
“Reconciling strong microeconomic perspective with weak macroeconomic outcomes involves looking at segment-specific data,” said Basu. “While some segments like office and lodging continue to struggle in the context of behavioral shifts wrought by the pandemic, other segments are showing significant momentum. This is especially apparent in certain public construction segments like water/sewer, highway/street and flood control.”