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AGC: Construction spending slips in February

April 2, 2024
Decline in nonresidential projects leads to month-over-month to decrease, but all categories are up from February 2023, suggesting monthly downturn is temporary, officials report

Total construction spending declined from January to February to an annual rate of nearly $2.1 trillion, but all categories posted year-over-year gains, according to a recent analysis of government data by the Associated General Contractors of America.

Association officials noted, however, that the monthly decline could have been caused by changes in winter weather patterns, including heavy rain and snow in the west, during February.

“There were monthly decreases for nearly all types of nonresidential projects,” Ken Simonson, the association’s chief economist, said in a news release. “But every spending segment increased from a year earlier, suggesting the current downturns may reflect short-term challenges such as severe weather, not fading demand.”

Construction spending, not adjusted for inflation, totaled $2.092 trillion at a seasonally adjusted annual rate in February. That figure is 0.3% below the downwardly revised January rate, but 10.7% above the February 2023 level.

Spending on private nonresidential construction decreased 0.9% in February but rose 12.6% from February 2023. The largest segments recorded similar patterns. Manufacturing construction slid 0.6% for the month but jumped 31.8% year-over-year. Commercial construction slumped 1.7% in February but ticked up 0.9% over 12 months. Investment in power, oil, and gas projects declined 0.5% for the month but rose 6.9% year-over-year.

Public construction spending decreased 1.2% for the month but soared 16.8% from a year earlier. The largest public segment, highway, and street construction, fell by 1.6% in February but was up 18.5% from February 2023. Public educational spending slumped 1.8% from January but climbed 15.4% year-over-year.

Spending on private residential construction gained 0.7% for the month and 6.3% year-over-year. Single-family construction climbed 1.4% from January, the 10th straight increase. Spending on multifamily projects dipped 0.2% in February but remained 6.1% higher than a year earlier.

Association officials said the big jump in year-over-year public-sector investments in infrastructure and construction was good news for the industry, but also cautioned that many firms continue to struggle to find enough workers to hire. They urged federal, state, and local officials to boost funding for construction education and training programs to help encourage more people to seek construction careers.

“It is in the public interest to make sure there are enough people available to keep pace with growing investments in infrastructure, manufacturing, and clean energy,” said Jeffrey D. Shoaf, the association’s CEO. “Investing in new construction education and training programs and creating a workable legal immigration process for skilled construction workers will help get key projects completed and provide another path to middle class prosperity for many workers.”

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BT staff