Thanks to bad weather and pricier materials, construction spending fell slightly last month — though it’s still higher than it was last year.
National construction spending dropped 0.8 percent to a seasonally adjusted estimated rate of $1.516 trillion in February, according to the Census Bureau’s monthly report. In January, spending hit a record rate of $1.528 trillion
Winter storms in Texas, which slowed down construction projects, were partly to blame, along with soaring costs and the decline in nonresidential projects, according to the Associated General Contractors of America.
“Contractors are having a hard time finding work, and when they do, they are getting squeezed by rapidly rising materials prices,” said Stephen Sandherr, the organization’s CEO. “New infrastructure investments will certainly help with demand, but the industry also needs Washington to help address supply-chain problems and rising costs.”
Despite February’s decline, construction spending is still higher than it was a year ago. Total spending was up 5.3 percent year-over-year.
Residential construction spending — both private and public — was up 21 percent compared to February 2020. That’s important, considering housing inventory remains at historically low levels — and economists say the lack of available homes on the market is beginning to eat into sales. Low inventory, combined with seemingly unstoppable demand from buyers, is also pushing home prices ever-higher.