Steel Markets
Nonresidential Drives September Construction Spending: AGC
Written by David Schollaert
November 4, 2022
Spending on nonresidential construction now outpaces residential construction projects, the Associated General Contractors of America (AGC) reported.
Construction spending hit $1.811 trillion at a seasonally adjusted annual rate in September, a 0.2% increase versus August and up nearly 11% year-on-year (YoY).
“Demand remains strong for a range of nonresidential construction segments despite supply chain challenges and rising interest rates,” AGC CEO Stephen Sandherr said.
But gains in public sector transportation construction, including for highways and streets, have lagged other fast-growing segments due to Buy America and other new regulatory requirements, the report said.
AGC said new Buy America rules were “keeping officials from moving forward on some projects as they await guidance from the Biden administration on how to comply.”
“The best way to accelerate investments in our aging transportation sector is to provide immediate relief to the Buy America rules that make no sense at a time when supply chains remain very challenged,” Sandherr said. “The administration can provide an immediate boost to infrastructure upgrades by relaxing what are proving to be unworkable new requirements.”
Construction spending on private residential construction was flat in September but is still up 12.7% YoY. Spending on private nonresidential construction was up 1.0% in September and 10.5% for the year.
Private nonresidential construction gains were driven primarily by manufacturing construction, which was up 7.6% month-on-month (MoM) and 43.3% YoY. And while commercial construction slipped by 0.7% for the month, it was 22.6% higher versus the same year-ago period. Lodging construction was up 0.7% in September and up 15.8% YoY.
Private sector power construction continued to decline, down 0.4% for the month and down 12.9% for the year.
Public construction spending decreased by 0.4% in September, with mixed results for the three largest segments. Highway and street construction spending was up (1.7% MoM and 8.7% YoY). Educational spending was flat MoM but down 1.0% YoY. Transportation construction spending declined (1.3% MoM and 3.2% YoY).
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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