ConDig (03-July-17). US construction spending was flat in May compared with the month prior as a fall in homebuilding was offset by an uptick in nonresidential construction, according to latest Commerce Department figures.

Overall construction spending was reported at a seasonally adjusted annual rate of $1.23 trillion, which was in line with last month’s revised figure, but up 4.5% on the same period last year.

Residential construction spending in May dipped 0.5% to $515.7 billion from $518.3 billion the month before.

A weaker residential sector comes as homebuilders are extending out completion times because they cannot find enough skilled workers and shortage of available lots persists.

Potential buyers are also being kept rooted to the sidelines of the market due to tight inventory, while prices continue to rise.

But nonresidential construction spending edged up 0.3% in May to $714.3 billion from $712 billion in April, while public construction rebounded 2.1% to $286.8 billion from $281 billion in April.

Officials at the Associated General Contractors of America said a mixture of worker shortages and political gridlock appears to be holding back construction sector growth.

“Spending on most types of private construction has remained relatively flat from month to month so far in 2017 but at a higher level than in the same period of 2016,” said Ken Simonson, the association’s chief economist.

“By contrast, public investment in infrastructure has generally declined from last year’s levels despite a pickup from April to May. At this point in the year, it looks as if private demand for structures remains healthy, but gridlock in Congress and in several state governments will depress public infrastructure spending.”