U.S. construction spending edged up in November

ARLINGTON, VA. — Total U.S. construction spending increased by 0.2 per cent in November, dragged down by a lack of new infrastructure projects along with a continuing slide in homebuilding, according to analysis by the Associated General Contractors of America (AGC) of federal spending data released Jan. 3.

Construction spending, not adjusted for inflation, totalled US$1.808 trillion at a seasonally adjusted annual rate in November, 0.2 per cent above the October rate and 8.5 per cent above the November 2021 rate. Spending on private residential construction declined for the sixth consecutive month in November, by 0.5 per cent, the AGC reported.

Spending on private non-residential construction rose 1.7 per cent in November, while public construction investment edged down 0.1 per cent.

Among private non-residential segments, spending on manufacturing plants, the largest type, jumped 6.5 per cent for the month and 43 per cent compared to November 2021. Commercial construction, comprising warehouse, retail and farm construction, was unchanged, while private power construction increased 1.2 per cent from October. Private health care construction rose 0.1 per cent for the month.

Residential spending shrank due to a 2.9 per cent contraction from October in single-family homebuilding. That outweighed increases of 2.4 per cent in multifamily construction and 1.3 per cent in additions and renovations to owner-occupied houses.

The largest public segment, highway and street construction, decreased by 1.0 per cent in November. Other infrastructure categories also slipped. Spending declined 0.2 per cent for transportation facilities and 2.0 per cent for water supply projects.

The decreases offset upticks of 0.1 per cent for education construction and 0.3 per cent for sewage and waste disposal construction.

“A variety of private non-residential categories, as well as multifamily projects, posted solid spending gains in November,” said Ken Simonson, the association’s chief economist, in a statement. “Many of these segments should continue to do well in 2023. But the timing of public construction, while well-funded, remains unclear.”