Materials and labour shortage impacts US construction

By Andy Brown02 August 2022

Five Liebherr 542 HC-L 18/36 cranes  participated in the construction of the Resort World in Las Vegas. Five Liebherr 542 HC-L 18/36 cranes participated in the construction of the Resort World in Las Vegas. (Photo: Liebherr)

Construction spending figures in the US are being impacted as materials and labour shortages are slowing schedules and increasing the cost of construction, according to the Associated General Contractors of America (AGC).

Total construction spending fell by 1.1% in June as spending on new housing and nonresidential projects declined compared to May, according to an analysis of federal spending data by the AGA.

“Strong demand for construction is being offset by rising materials prices and labour shortages,” said Stephen E. Sandherr, chief executive officer, AGC. “As firms stretch schedules and boost costs to cover rising materials prices it is getting harder for public and private owners to proceed with some planned projects.”

Construction spending, not adjusted for inflation, totalled US$1.76 trillion at a seasonally adjusted annual rate in June. That figure was 1.1% below the upwardly revised May rate and 8.3% higher than in June 2021. Private nonresidential construction spending declined for the fourth month in a row, slipping 0.5% from May, although the June rate was 1.7% higher than in June 2021.

Public construction spending decreased for the second-straight month, falling 0.5% from May but was up 0.4% from the year-ago rate. Residential spending fell by 1.6% for the month, but it up 15.4% compared to last June.

“Attracting more people into construction careers and fixing the broken supply chain for key materials will help kick start a number of stalled construction projects,” Sandherr said. “In other words, addressing labour and materials shortages is the best way to boost construction spending.”

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