Construction Spending Increases to Record $1.33 Trillion

The Associated General Contractors of America predicts spending should remain robust while labor shortage and rising interest rats could undermine long-term growth in demand.

By PROSALES Staff

Construction spending has reached a seasonally adjusted rate of $1.33 trillion, the Associated General Contractors of America (AGC) announced in a recent press release. Spending has grown 5.5% for the past nine months of 2018, with continued gains in both the public and private categories, according to the AGC.

While demand should remain strong in the coming months, tariffs, workforce shortages, and higher interest rates could stunt the long-term demand growth. According to the AGC, spending on public construction through the first nine months of 2018 was 7% higher than in the year-earlier period, with private construction spending 5.1% higher. Residential project spending increased 6.4% compared to the January through September period in 2017. AGC's data suggests single-family hombuiliding spending rose 6.4% year-to-year and spending on improvements to existing buildings climbed 7.1% year-to-year.

"Despite month-to-month fluctuations, the outlook remains positive for modest to moderate increases in most spending categories at least through the first part of 2019," AGC chief economist Ken Simonson said.