Private residential construction spending during August increased 0.9 percent from the previous month but crashed by five percent year-to-date, according to data from the Associated General Contractors of America.
Single-family homebuilding was up by 1.4 percent from July to August but fell 8.4 percent year-to-date. In comparison, spending on multifamily projects was down 0.9 percent for the month but up 6.5 percent year-to-date. Spending on residential improvements increased 0.8 percent for the month but took a 6.4 percent dive year-to-date.
Total construction spending totaled $1.287 trillion at a seasonally adjusted annual rate in August, a 0.1 percent uptick from July but 1.9 percent less than the August 2018. Year-to-date spending for January-August combined fell 2.3 percent from the year-ago total.
“Eighty percent of the nearly 2,000 contractors responding to our workforce survey this summer reported difficulty filling hourly craft positions,” said Ken Simonson, the association’s chief economist. “Of the firms experiencing staffing challenges, almost half—44 percent—said that projects had taken longer than anticipated. Those delays may be one reason that spending put in place is lagging, even though contractors almost universally report they are busy and would be doing even more projects if they could find enough workers.”
According to a recent Urban Land Institute's latest Real Estate Economic Forecast, inventory problems related to construction costs will hamper the single-family housing market, even though the economy will continue to remain solid.