October Construction Spending Notably HighDecember 4th, 2015 | Category: Industry News
Construction spending in October reached the highest level in nearly eight years, according to an analysis by the Associated General Contractors of America (AGC).
However, with growth shown in all major categories, AGC officials caution that demand for construction appears to be advancing at a faster rate than the supply of qualified workers available to fill positions at firms.
Construction spending in October totaled $1.107 trillion at a seasonally adjusted annual rate, 1.0 percent higher than the September total and 13.0 percent higher than in October 2014, notes AGC chief economist Ken Simonson. The October total was the highest since December 2007.
Multifamily residential construction grew 1.4 percent for the month and 27.9 percent year-over-year. Private nonresidential construction spending gained 0.6 percent for the month and 15.3 percent over 12 months.
“The breadth of the expansion and the large number of categories with double-digit increases suggests that construction will continue growing well into 2016,” says Simonson. “My only concern is whether contractors will be able to find enough qualified workers to undertake all of the projects.”
“We are reaching the point where demand for construction services is going to outstrip the supply of qualified and available workers,” adds Stephen E. Sandherr, the association’s chief executive officer. “Once that happens, firms are going to bid on fewer projects, slow their schedules and worker shortages will bring more pressure on contractors to adjust their prices to meet the challenge of finding qualified craft professionals to perform the work.”