All major segments of US construction see spending increase despite skills challenge
03 October 2023
All major segments of construction in the US saw increases in spending in August, although an ongoing shortage in skilled workers could put the brakes on growth.
That’s according to Associated General Contractors of America (AGC), which recorded a total spending increase of 0.5% during the month as compared to July.
Construction spending, not adjusted for inflation, totaled $1.98 trillion at a seasonally adjusted annual rate in August.
Spending on private residential construction increased for the fourth consecutive month in August, by 0.6%. Spending on private non-residential construction increased by 0.3% in August, while public construction investment increased 0.6%.
Spending was mostly positive among large non-residential segments. Spending on manufacturing plants increased 1.2% between July and August. Spending on power, highway and street, office, and health care construction each grew by 0.4% for the month. Educational construction was flat.
By contrast, commercial construction—comprising warehouse, retail, and farm construction—fell by 0.9% in August compared to a month ago.
The AGC welcomed the growing demand for construction services but warned that construction firms remain concerned about finding enough qualified workers to keep pace with demand.
Ken Simonson, the association’s chief economist, said, “For now, all types of construction are growing. But unless the supply of qualified workers increases, many projects are likely to be delayed.”
Association officials noted that its recent workforce survey found that 88% of construction firms that are hiring are having a hard time finding enough qualified workers.
They urged federal officials to allow more people with construction skills to lawfully enter the country as a short-term solution.