Construction spending edges up 0.1% in August

ConDig (01-Oct-19).  US construction spending inched up 0.1% in August from the month prior, but dipped 1.9% from year-ago levels due to split trends in the residential and nonresidential sectors, according to latest Commerce Department figures.

Construction spending totaled a seasonally adjusted annual rate of $1.287 trillion in August compared with $1.285 trillion the month before. For the year-to-date, spending for January-August combined fell 2.3% compared with the year-ago period.

Public construction spending nudged up 0.4% In August and 4.6% year-to-date, while private nonresidential spending dipped 1% from July to August and 0.1% for the year-to-date. 

Private residential construction spending rose 0.9% for the month, but crumbled 5% for the year-to-date. Single-family homebuilding increased 1.4%, but decreased 8.4% for the year-to-date, while spending on multifamily projects was down 0.9% but up 6.5% year-to-date.

Officials at the Associated General Contractors of America (AGC) warned that project delays may worsen due to worker shortages, adding that nearly three quarters of respondents to its survey expected it will be as hard or harder to hire hourly craft workers in the next 12 months. It added that 29% of firms are putting longer completion times into their bids or contracts to offset worker shortages.

“Eighty percent of the nearly 2,000 contractors responding to our workforce survey this summer reported difficulty filling hourly craft positions,” said Ken Simonson, chief economist at AGC. 

“Of the firms experiencing staffing challenges, almost half—44 percent—said that projects had taken longer than anticipated. Those delays may be one reason that spending put in place is lagging, even though contractors almost universally report they are busy and would be doing even more projects if they could find enough workers.”

A recent survey by Autodesk and AGC found that over three quarters of US contractors face difficulties filling hourly craft positions, which has raised construction costs and pushed out project completion times,

Of the nearly 2,000 survey respondents, 80% said they are struggling to find qualified craft workers.

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