By Natalie Mojica
The Commerce Department reported that U.S. construction spending had increased 1.3% as construction outlays rose 0.8%, likely foreshadowing that expenditures by the construction industry will continue to rise higher than what economists predicted.
Construction spending refers to monthly estimates of the total dollar value of construction done on new structures or improvements to existing facilities for private and public sectors every month in the U.S.
Specifically, residential construction outlays increased 1.3% and single-family homebuilding advanced by 1.2%, while multi-family housing projects decreased by 0.1%. Spending on public construction projects went up 0.6%, and federal government spending dramatically increased by 13.8%.
Despite the influx in spending, homebuilding has been limited by the rise in prices for building materials like lumber. Last November, the U.S. almost doubled imported Canadian softwood lumber duties to 17.9% due to anti-dumping and countervailing duty orders. These duties starkly differ from when the Trump administration reduced tariffs to 9% in December 2020.
Last month, the National Association of Home Builders made a statement about how building material production bottlenecks raised construction costs and delayed projects. Higher material costs and shortages extend single-family home construction projects by weeks, discouraging lower-income groups and first-time home buyers.
The NAHB has also written a letter to House representatives to address supply chain and port disruption issues for lumber and other building supplies.
“These badly needed improvements will go a long way to ensuring needed building materials reach job sites across the country in a timely manner and as cost-effectively as possible,” the NAHB letter stated. “Your efforts will help ensure home builders have the tools and materials they need to make the American dream of homeownership a reality for all Americans.”