October witnessed an increase in construction spending, according to an analysis by the Associated General Contractors of America.
Ken Simonson, the association's chief economist, said construction spending in October totaled $971 billion at a seasonally adjusted annual rate, up 1.1 percent from the September total and 3.3 percent higher than in October 2013. Private residential spending increased 1.3 percent from September and 1.9 percent from a year earlier, while private nonresidential spending dropped 1 percent for the month, but rose 6.4 percent year-over-year. Public construction spending increased 1.5 percent from September and 2.3 percent from a year ago.
"Today's data shows that construction growth remains volatile," said Simonson. "While overall construction spending jumped by more than one percent in October, the gain followed two months of stagnation. Public construction was the fastest-growing segment for the month but the slowest-growing over the past year and for the first 10 months of 2014 combined. Conversely, private nonresidential construction inched down from September to October but has risen at double-digit rates —11 percent — for the combined January through October period. And private residential construction continues to grow very modestly, with multifamily construction taking the lead on an annual basis."
Single-family home construction gained 1.8 percent for the month and 13.2 percent over 12 months, and multi-family increased 1 percent from the September level and jumped 27.2 percent from a year earlier.
Commercial construction decreased 2.6 percent for the month but increased 9.3 percent for the year.
"For 2014 as a whole and 2015, private nonresidential spending and multifamily spending should be the strongest segments, followed by single-family construction, with very limited prospects for public construction."
Association officials said the rise in construction demand comes with growing shortages of qualified construction workers.
"We need to make sure there are enough workers available to meet growing demand for construction," said Stephen E. Sandherr, the association's chief executive officer.