Construction Spending Dips in May
Total construction spending edged down 0.1 percent in May as spending on new houses and apartments stalled, while public and private nonresidential construction slumped, according to an analysis the Associated General Contractors of America released today of federal spending data. Association officials said the construction industry’s capacity to build projects was being limited by workforce shortages and supply chain problems.
“Contractors say demand remains strong for nonresidential projects but they are having trouble both getting materials on time and hiring enough workers,” said Ken Simonson, the association’s chief economist. “The industry’s unemployment rate was down to 3.8 percent in May, a sign of how scarce experienced workers are.”
Construction spending, not adjusted for inflation, totaled $1.78 trillion at a seasonally adjusted annual rate in May, 0.1 percent below the upwardly revised April rate and 9.7 percent higher than in May 2021. Private nonresidential construction spending declined for the third month in a row, slipping 0.4 percent from April, although the May rate was 3.7 percent higher than in May 2021. Public construction spending decreased for the second-straight month, falling 0.8 percent from April and 2.7 percent from the year-ago rate.