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Mon, 06/03/2024 – 12:12

Construction Spending Remains Up by 10 Percent Compared to a Year Ago, However, as Most Firms Continue to Struggle to Find Enough Qualified Workers to Keep Pace with Demands for New Projects

Total construction spending inched down from March to April with declines in public projects and a mixed pattern among private residential and nonresidential categories, according to an analysis of a new government report that the Associated General Contractors of America released today. Association officials noted that construction spending levels remain well above where they were a year ago and that most firms continue to struggle to find enough qualified workers to hire.

“Overall spending slipped despite upturns in manufacturing and power construction and a slight pickup in single-family homebuilding,” said Ken Simonson, the association’s chief economist. “Most public segments continued a seesaw pattern, with decreases in April following gains in other recent months.”

Construction spending, not adjusted for inflation, totaled $2.099 trillion at a seasonally adjusted annual rate in April. That figure is 0.1 percent below the upwardly revised March rate, but 10.0 percent above the April 2023 level.

Spending on private nonresidential projects declined 0.3 percent on balance in April but rose 8.3 percent year-over-year. The largest private segment, manufacturing construction, climbed 0.9 percent for the month and 17.1 percent over 12 months. Commercial construction fell 1.1 percent in April and was virtually unchanged from a year earlier. Investment in power, oil, and gas projects edged up 0.1 percent in April and rose 7.4 percent year-over-year.

Spending on private residential construction ticked up 0.1 percent for the month and 8.0 percent year-over-year. Single-family construction rose for the 12th month in a row, by 0.1 percent, and 20.4 percent year-over-year. Multifamily spending fell 0.3 percent in April but climbed 2.3 percent from April 2023.

Public construction spending fell 0.3 percent for the month but rose 16.7 percent from a year earlier. The largest public segment, highway and street construction, fell 0.5 percent in April but rose 16.4 percent over 12 months. Public educational spending fell 0.2 percent in April but rose 16.8 percent over the year.

Association officials said they will be releasing a new report, co-authored by the Progressive Policy Institute, next week detailing the massive federal funding gap between support for collegiate education and investments in career and technical education for fields like construction. They are continuing to urge policy makers to boost funding for construction education and training programs and find new ways to allow more people to enter the country lawfully to work in construction.

“The federal government is proving to be one of the biggest obstacles to recruiting more people into the construction industry,” said Jeffrey D. Shoaf, the association’s chief executive officer. “It is hard to be competitive when the federal government is spending significantly more resources encouraging students to go to college than what it is investing in preparing people for high-paying construction careers.”