National – Construction spending hit a seasonally adjusted annual rate of $1.329 trillion and grew 5.5% for nine months of 2018 combined, with continued year-to-date gains for major public and private categories, according to an analysis of new government data by the Associated General Contractors of America. Association officials said that while demand for construction should remain strong for the next several months, the construction sector could be impacted by new trade tariffs, continues workforce shortages and higher interest rates.
Major segments continued year-to-date gains. The largest public categories recorded year-to-date gains of 5.8% for highway construction, 2.0% percent for educational construction and 15.8% percent for transportation construction. Of the three private residential spending categories, single-family homebuilding rose 6.4% year-to-date, multifamily was virtually unchanged and improvements to existing buildings climbed 7.1%. Among private nonresidential spending segments, the largest—power construction (including oil and gas field and pipeline structures)—edged up 2.3%, commercial (retail, warehouse and farm) construction rose 4.8%, office construction increased 7.4% and manufacturing construction declined 3.4%.
Association officials said that overall economic conditions remain positive as the economy continues to benefit from recently enacted tax and regulatory reforms. But they warned that a growing trade dispute with China, shortages of qualified workers and rising interest rates could undermine future demand for construction services. They urged federal officials to resolve trade disputes and boost investments in career and technical education programs.