In a recent development that has taken place, overall construction spending in the US dipped by 0.1% in February since the demand for data centres as well as manufacturing plants balanced out weak single-family homebuilding and public construction.
Apparently, the Associated General Contractors of America’s- AGC evaluation of the federal data determined that the demand for numerous kinds of commercial construction is going to remain strong for the immediate future. The spending on construction that was not adjusted for inflation was valued at $1.84 trillion because of a seasonally adjusted annual rate that existed in February, which was notably 0.1% lower than the January rate.
As far as private residential construction is concerned, spending dipped for the ninth consecutive month in February by 0.6%. When it came to non-residential construction, there was an increase of 0.7% in February, although the public construction arena saw an investment dip of 0.2%.
There was also variation in spending when it came to large non-residential segments. The biggest of them all, the manufacturing plant segment, saw a jump of 2.7%. Private office construction like the data centres and Power construction, saw an increase by 0.5% and 1.5% respectively. That said, commercial construction, which majorly comprises retail, warehouse, farm construction, etc., saw a decline of 0.6% in February.
When it comes to the public categories, highway and street construction saw a jump of 0.3%, but education construction declined by 0.9%. It is well to note that public spending on transportation projects saw a fall of 0.7%.
When it comes to the public’s residential spending, a decline was seen due to a 1.8% shrink from January in single-family homebuilding. This outweighed a surge of 1.4% in multifamily construction. The chief economist of the association, Ken Simonson, opined that continued strong demand for data centres as well as manufacturing plants, besides the increase in power projects, contributed to the surge in private non-residential construction. According to him, these segments are most likely to keep growing in the months to come.
However, as per association officials, many projects have been held up due to a lack of clear guidance when it comes to new regulatory measures that have been associated with novel federal investments when it comes to construction. This included confusion on the administration’s approach as far as Buy America rules are concerned, as well as labour measures concerning the new semiconductor funding and registered apprenticeship mandate related to green energy investments, which are either unclear or not finished. Stephen E. Sandherr, the AGC Chief Executive, said that the president as well as his team are more focused on interpreting laws so as to fit their agenda than on making progress when it comes to the billions in new federal investments that the Congress has gone on to authorise. He went on to add that instead of adding more miles of new red tape, the authorities must work with the construction sector to pry out ways to get the construction started as fast as possible.