Total construction spending in the US hit $2.1 trillion in January, nearly 12% (11.7%) higher than the figure for January 2023, the Associated General Contractors of America (AGC) said Friday.
That’s despite a small dip of 0.2% in spending across the board between December and January, which the AGC put down to bad winter weather.
Public construction spending fell 0.9% for the month but jumped 20.1% from a year ago, as President Joe Biden’s Bipartisan Infrastructure Law, passed in November 2021, translates into projects breaking ground.
It allocated $400bn for work on roads, bridges, ports, rail, and water infrastructure, leading to 40,000 separate projects across the country, the administration said in November.
Spending on private residential construction gained 0.2% for the month and 5.2% year-over-year.
Factory boom
Private nonresidential construction inched down 0.1% in January but rose 15.2% from January 2023.
That includes building factories, another sector boosted by legislation passed by the current administration.
The CHIPS and Science Act passed in 2021 earmarked $53bn for semiconductor and electronics manufacturing, and gave a 25% tax credit for capital investments in semiconductor manufacturing.
A third law, the Inflation Reduction Act, sought to stimulate the green technology sector, incentivising domestic battery production, for instance.
These laws saw construction spending on new factories more than double in 2023 compared with 2022, the Atlantic Council reports.
On average, US companies spent a combined $16.2bn a month building new factories in 2023, it said, a figure that dwarfs the amount spent in the EU.
Made in America?
The AGC took issue with one of Biden’s legislative initiatives, however.
The Bipartisan Infrastructure Law includes the “Build America, Buy America Act”, which requires US-made materials and components on federally-funded construction projects.
Where US-made materials and components are unavailable or too expensive, builders can apply for waivers, but the AGC says this system is prone to delays and creates bottlenecks.
Last month, the AGC joined three other national trade associations to call for an overhaul of the waiver system.
Signing the petition were the AGC, the American Public Transportation Association, the American Road & Transportation Builders Association, and the National Association of Home Builders.
