Steel Markets
Residential Leads Construction Spending in August
Written by Sandy Williams
October 1, 2020
Construction spending rose 1.4 percent in August primarily due to a robust residential construction sector, said the Associated General Contractors of America. AGC cautioned that without federal support, nonresidential construction will continue to stagnate.
“The August spending report shows a stark divide between housing and nonresidential markets that appears likely to widen over the coming months,” said AGC Chief Economist Ken Simonson. “With steadily rising business closures and worker layoffs, and growing budget gaps for state and local governments, project cancellations are likely to mount and new starts will dwindle.”
Construction spending totaled $1.41 trillion at a seasonally adjusted annual rate in August. Residential spending jumped 3.7 percent, while total nonresidential spending slipped 0.1 percent.
Private nonresidential construction spending fell in nine out of 11 categories, contracting 0.3 percent from July to August. Commercial construction and power construction, two of the largest segments, each fell 1.1 percent. Manufacturing construction spending expanded 2.2 percent, but office construction slipped 0.3 percent, said AGC.
Public spending overall inched up 0.1 percent in August, but has been on a downward trend since March, falling 2.5 percent.
Housing construction has been robust with contractors having difficulty keeping up with demand. Private residential construction spending rose 3.7 percent in August, supported by a 5.5 percent gain in single-family homebuilding and a 3.0 percent gain in home improvements. Multifamily construction spending was fairly static with a 0.1 percent decline from July.
“One of the biggest challenges facing the construction industry is the lack of demand for many new types of commercial and local infrastructure projects, especially after the current crop of projects is completed,” said Stephen E. Sandherr, AGC’s chief executive officer. “Washington officials can give a needed boost to construction demand and employment by boosting infrastructure and putting in place liability protections for firms that are protecting workers from the coronavirus.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets
Tampa Steel Conference: Two weeks to go!
With just two weeks to go, we have over 400 registered so far for the 36th annual Tampa Steel Conference. Join us and hundreds of industry executives at the JW Marriott Tampa Water Street from Sunday, February 2, through Tuesday, February 4.
Galvanized buyers see glimmers of optimism amidst the chaos
Reflecting on 2024 and looking ahead to the new year, galvanized steel buyers on this month’s HARDI call expressed a mix of cautious optimism with lingering uncertainties.
Construction spending steady in November
Construction spending inched higher in November for a second straight month.
Steady architecture billings signal improving conditions
The November ABI decreased month over month but was still the third-highest reading of the past two years.
Fitch warns more tariffs will pressure global commodity markets
“New commodity-specific tariffs, mainly on steel and aluminum products, could widen price differentials and divert trade flows,” the credit agency forewarned.