US Census

Total Construction

Construction spending during July 2024 was estimated at a seasonally adjusted annual rate of $2,162.7 billion, 0.3 percent (±1.0 percent)* below the revised June estimate of $2,169.0 billion. The July figure is 6.7 percent (±1.8 percent) above the July 2023 estimate of $2,027.4 billion. During the first seven months of this year, construction spending amounted to $1,237.5 billion, 8.8 percent (±1.2 percent) above the $1,137.4 billion for the same period in 2023.

Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $1,678.7 billion, 0.4 percent (±0.7 percent)* below the revised June estimate of $1,685.5 billion. Residential construction was at a seasonally adjusted annual rate of $941.6 billion in July, 0.4 percent (±1.3 percent)* below the revised June estimate of $945.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $737.2 billion in July, 0.4 percent (±0.7 percent)* below the revised June estimate of $740.2 billion.

Public Construction

In July, the estimated seasonally adjusted annual rate of public construction spending was $484.0 billion, 0.1 percent (±1.8 percent)* above the revised June estimate of $483.5 billion. Educational construction was at a seasonally adjusted annual rate of $100.8 billion, 0.9 percent (±2.6 percent)* below the revised June estimate of $101.8 billion. Highway construction was at a seasonally adjusted annual rate of $140.9 billion, 0.8 percent (±4.6 percent)* below the revised June estimate of $142.0 billion.

Dodge Momentum Index Rises 3% in August

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, increased 2.9% in August to 220.4 (2000=100) from the revised July reading of 214.2. Over the month, commercial planning expanded 1.9% and institutional planning improved 5.7%.  

“Owners and developers continued to prime the planning queue in August, ahead of next year’s anticipated stronger market conditions,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “With the Fed’s September rate cut all but finalized, the influence of selective lending standards and inflation should moderate next year, alongside a modest upgrade to consumer demand. As a result, stronger planning activity was widespread in August, with most nonresidential sectors seeing growth.” 

Commercial planning saw another month of broad-based improvements. After slowing down in recent years, warehouse projects have gained momentum over the last three months. Hotels and retail planning have been steadily expanding as well. Data centers continued to dominate large project activity, but the rate at which planning projects entered the queue in August moderated after several months of very strong growth. On the institutional side, healthcare was the primary driver of this past month’s expansion, followed by recreational planning. In August, the DMI was 31% higher than in August of 2023. The commercial segment was up 42% from year-ago levels, while the institutional segment was up 8% over the same period.  

A total of 30 projects valued at $100 million or more entered planning throughout August. The largest commercial projects included the $500 million portion of the Tract Data Center Complex in Yuma, Arizona, and the $462 million KDC Data Center Campus in Irving, Texas. The largest institutional projects to enter planning were the $440 million Geisinger Medical Center Tower in Danville, Pennsylvania and the $240 million academic and research facility at the University of Cincinnati in Ohio.   

The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.

ABC

Nonresidential Construction Employment Increased by 28,300 in August

The construction industry added 34,000 jobs on net in August, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment grew by 228,000 jobs, an increase of 2.8%. 

Nonresidential construction employment increased by 28,300 positions on net, with growth in all three subcategories. Nonresidential specialty trade added the most jobs on net, increasing by 14,000 positions. Heavy and civil engineering and nonresidential building added 13,500 and 800 jobs, respectively.

The construction unemployment rate fell to 3.2% in August. Unemployment across all industries declined from 4.3% in July to 4.2% last month.

“August’s employment report is perfectly consistent with the notion of a soft landing,” said ABC Chief Economist Anirban Basu. “Unemployment fell both economywide and in the nation’s construction sector. Job growth in nonresidential construction was both brisk and broad-based. Moreover, Federal Reserve officials continue to indicate that they are ready to reduce interest rates, which is expected within the next two weeks.

“And yet, the level of concern has been rising among contractors,” said Basu. “According to both ABC’s Construction Confidence Index and Construction Backlog Indicator, the outlook among contractors is dimming gradually. Many projects have been postponed recently in the context of still-elevated borrowing costs and tighter lending conditions.

“Despite indications that interest rates are coming down, they may not fall as rapidly as many contractors hope,” said Basu. “The economy remains too strong to warrant rapid declines in interest rates implemented by the Federal Reserve. Moreover, average hourly earnings expanded more rapidly in August than anticipated, suggesting that inflation remains sticky and that Fed officials may only be able to reduce rates gingerly.”