C
onstruction spending rose 0.4% from September to October as residential building picked up pace, offsetting declines in public outlays and mixed results for private nonresidential categories. According to the Associated General Contractors of America's analysis of a new government report, construction has yet to begin on many federally funded projects due to lengthy regulatory reviews.

    "Project announcements by the federal government are not translating into actual work," said Ken Simonson, the association's chief economist. "Meanwhile, major private sectors are growing slowly or shrinking."

    Construction spending reached $2.174 trillion at a seasonally adjusted annual rate in October, 0.4% above September and 5% higher than October 2023. Private residential spending increased 1.5% in October and 6.4% year-over-year, driven by single-family homebuilding (up 0.8%) and homeowner additions/renovations (up 2.7%).

    Public construction spending declined 0.5% for the month but rose 4.5% over 12 months. Private nonresidential spending slipped 0.3% in October but posted a 3.5% year-over-year gain, with manufacturing and power construction showing growth.

    Association officials are urging the new administration to accelerate federal permitting reviews and give agencies more flexibility in complying with Buy America rules. "There's no reason projects can't meet high standards while completing reviews in months, not years," said Jeffrey D. Shoaf, chief executive officer.