Construction spending during August 2021 was virtually unchanged from last month, from a seasonally adjusted annual rate of $1,584 billion to $1,584.1), according to data from the U.S. Census Bureau.
Residential construction spending was up 0.4% while nonresidential construction spending dropped by the same figure.
Residential construction spending totaled $794.5 billion in August. That figure is up 23.9% from the August 2020 total of $642 billion.
Nonresidential construction spending totaled $788.6 billion in August, after reaching $791.4 billion in July.
It was also a 3% drop from August 2020, when nonresidential construction spending totaled $812.9 billion.
During the first eight months of this year, construction spending amounted to $1,034.5 billion, which is 7% above the $966.7 billion for the same period in 2020.
Spending on private construction was at a seasonally adjusted annual rate of $1,242.2 billion, 0.1 percent (±0.5 percent)* below the revised July estimate of $1,243.7 billion.
In August, the estimated seasonally adjusted annual rate of public construction spending was $341.9 billion, 0.5% above the revised July estimate of $340.3 billion.
“The nonresidential construction spending data are among the most interesting to monitor as the economy continues to wrestle with COVID-19, supply chain disruptions and rampant uncertainty regarding the direction of federal policymaking,” ABC Chief Economist Anirban Basu said. “First, nonresidential construction spending dynamics are shaped by all of the major forces shaping economic outcomes today, including labor shortages, surging input prices, massive liquidity and wavering confidence.
“Second, despite the many challenges they have faced, contractors continued to express confidence regarding near-term prospects until recently, per ABC’s Construction Confidence Index,” Basu continued. “For economists, who have been focused on phenomena such as the growing volatility of asset prices, rising freight costs, ongoing lockdowns in parts of the global economy and still-high infection rates in America, that expression of abundant confidence has been somewhat surprising. Today’s data release reminds us that challenges abound, with the trajectory of the nonresidential segment remaining on a downward trend that has now been in place for many months.
“Third, a growing number of contractors indicate that the combination of increasingly expensive labor and rising materials prices are inducing more project owners to postpone work,” Basu added. “This has manifested itself in a number of ways, including the inability of nonresidential construction spending to achieve growth and a recent decline in backlog, as measured by ABC’s Construction Backlog Indicator. As if this were not enough, a bipartisan infrastructure package that appeared set to pass is now jeopardized by jumbled political dynamics.”