The U.S. Census Bureau announced that total construction spending during September 2022 was estimated at a seasonally adjusted annual rate of $1,811.1 billion, 0.2% (±1.0%) above the revised August estimate of $1,807.0 billion. The September figure is 10.9% (±1.5%) above the September 2021 estimate of $1,632.9 billion.
During the first nine months of this year, construction spending amounted to $1,353.7 billion, 11.4% (±1.0%) above the $1,215.6 billion for the same period in 2021.
Highway construction was up 1.7%.
In September, the estimated seasonally adjusted annual rate of public construction spending was $360.9 billion, 0.4% (±1.8%) below the revised August estimate of $362.1 billion. Educational construction was at a seasonally adjusted annual rate of $78.2 billion, virtually unchanged from (±2.6%) the revised August estimate of $78.2 billion. Highway construction was at a seasonally adjusted annual rate of $108.4 billion, 1.7% (±4.3%) above the revised August estimate of $106.6
Spending on private construction was at a seasonally adjusted annual rate of $1,450.3 billion, 0.4% (±0.5%) above the revised August estimate of $1,444.9 billion.
Residential construction was at a seasonally adjusted annual rate of $918.0 billion in September, virtually unchanged from (±1.3%) the revised August estimate of $918.0 billion.
Nonresidential construction was at a seasonally adjusted annual rate of $532.3 billion in September, 1.0% (±0.5%) above the revised August estimate of $526.9 billion.
“Demand remains strong for a range of nonresidential construction segments despite supply chain challenges and rising interest rates,” said Stephen E. Sandherr, Associated General Contractors of America chief executive officer. “But transportation infrastructure investments would likely have been higher if it wasn’t for the inevitable regulatory confusion that comes with the new Buy America requirements.”
Association officials noted that the rate of growth for transportation-related infrastructure, including for highways and street, has lagged other fast-growing construction segments despite the bipartisan infrastructure bill that was signed into law. They noted that new Buy America and other regulatory requirements that were included in the law are keeping officials from moving forward on some projects as they await guidance from the Biden administration on how to comply.
“The best way to accelerate investments in our aging transportation sector is to provide immediate relief to the Buy America rules that make no sense as a time when supply chains remain very challenged,” said Sandherr. “The administration can provide an immediate boost to infrastructure upgrades by relaxing what are proving to be unworkable new requirements.”
Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said, “The disconnect between contractor confidence, which remains elevated according to ABC’s Construction Confidence Index, and nonresidential construction spending continues. While nonresidential construction spending is below February 2020 levels, many contractors report operating at capacity. This has much to do with worker and equipment shortages.
“Many projects under construction in America began prior to the rapid increase in borrowing costs that started earlier this year,” said Basu. “With interest rates on the rise and the economy expected to slow, nonresidential spending will likely decline further, at least in segments vulnerable to economic downturns. Contractors that focus on public construction work stand to be in far better shape given recent federal legislation and excess pandemic relief funds waiting to be spent by many state and local governments.”