Construction Spending Rises in October

Construction spending during October 2024 was estimated at a seasonally adjusted annual rate of $2,174.0 billion, 0.4% (±1.2%) above the revised September estimate of $2,164.7 billion.

The October figure is 5.0% (±1.5%) above the October 2023 estimate of $2,071.1 billion. 

During the first 10 months of this year, construction spending amounted to $1,814.8 billion, 7.2% (±1.2%) above the $1,693.2 billion for the same period in 2023.

In October, the estimated seasonally adjusted annual rate of public construction spending was $497.6 billion, 0.5% (±2.0%) below the revised September estimate of $500.0 billion.

  • Highway construction was at a seasonally adjusted annual rate of $141.1 billion, 0.7% (±5.3%) below the revised September estimate of $142.1 billion.
  • Educational construction was at a seasonally adjusted annual rate of $105.3 billion, 0.4% (±2.5%) below the revised September estimate of $105.7 billion.

Spending on private construction was at a seasonally adjusted annual rate of $1,676.4 billion, 0.7% (±0.7%) above the revised September estimate of $1,664.7 billion.

  • Residential construction was at a seasonally adjusted annual rate of $934.0 billion in October, 1.5% (±1.3%) above the revised September estimate of $920.3 billion.
  • Nonresidential construction was at a seasonally adjusted annual rate of $742.3 billion in October, 0.3% (±0.7%) below the revised September estimate of $744.4 billion. 

“Total construction spending rose sharply in October, but that was entirely due to a sharp increase in residential activity,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Nonresidential construction spending contracted for the month, and the declines were widespread, with spending down in 11 of the 16 subsectors. The 3.9% increase in nonresidential spending over the past 12 months is the smallest since December 2021.

“Some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton,” said Basu. “The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%.

“The effects of these storms on construction spending dynamics should largely dissipate by the end of the year,” said Basu. “Given that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, there’s reason to expect nonresidential construction spending to rebound in the coming months.”

Associated General Contractors of America (AGC) officials said construction has yet to begin on many federally funded projects amid lengthy regulatory reviews.

“Despite a flurry of project announcements by the federal government, much of the money still has not been awarded in construction contracts, let alone work under way,” said Ken Simonson, AGC chief economist. “At the same time, major private categories are growing more slowly or shrinking.”

Association officials urged the incoming Trump administration and Congress to explore ways to accelerate federal permitting reviews for infrastructure and construction projects. They also urged the new administration to give federal agencies greater flexibility in complying with new Buy America rules. For example, agencies need to be able to provide waivers when no domestically produced materials are available.

“There is no reason the federal government can’t hold projects to the same high standards and still complete required reviews in months, instead of years,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Cutting federal review times and giving agencies more flexibility will help get more construction projects started.”

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