Construction spending in the United States saw a modest increase of 0.4 percent from September to October, reaching a seasonally adjusted annual rate of $2.174 trillion. This rise was primarily driven by gains in residential construction, which offset declines in public sector spending and mixed results in private nonresidential projects. The data comes from a government report analyzed by the Associated General Contractors of America.
Ken Simonson, the association’s chief economist, noted that despite numerous project announcements by the federal government, many federally funded projects have not yet commenced due to prolonged regulatory reviews. "Despite a flurry of project announcements by the federal government, much of the money still has not been awarded in construction contracts, let alone work under way," he said. He also pointed out that major private categories are experiencing slower growth or contraction.
The report highlighted that private residential spending increased by 1.5 percent in October and was up 6.4 percent compared to October 2023. Single-family homebuilding rose by 0.8 percent for the month and 1.3 percent year-over-year, while multifamily construction edged up slightly by 0.2 percent but declined by 6.8 percent compared to last year.
Public construction spending fell by 0.5 percent for the month but showed an increase of 4.5 percent over a twelve-month period. Key segments such as highway and street construction decreased both monthly and annually, while education construction dipped slightly for the month but rose marginally on an annual basis.
Private nonresidential spending saw a slight decline of 0.3 percent for October but posted a year-over-year gain of 3.5 percent. Manufacturing construction remained steady from September but was significantly higher than last year at this time.
Jeffrey D. Shoaf, CEO of the association, called on policymakers to expedite federal permitting processes for infrastructure projects and provide more flexibility regarding new Buy America rules: “There is no reason the federal government can’t hold projects to same high standards and still complete required reviews in months instead of years.”
Shoaf emphasized that reducing review times and granting agencies more leeway could facilitate quicker initiation of construction projects across various sectors.