Construction spending in August reached a seven-year high and climbed at the fastest rate since 2006, according to a report by the Associated General Contractors of America.
Outlays in August totaled $1.086 trillion at a seasonally adjusted annual rate, up 13.7 percent from a year earlier. Spending was at its highest level since May 2008 and the year-over-year growth rate was the strongest since March 2006.
Private nonresidential spending in August increased 16.9 percent from a year earlier, while private residential spending was up 16.1 percent. Public construction spending rose 7 percent from August 2014.
“There has been exceptionally strong growth in manufacturing, lodging and apartment construction all year,” said AGC Chief Economist Ken Simonson said. “More recently, office, health care, highway and educational structures have rebounded as well.”
Association officials warned that growing demand for construction is likely to add to the challenges many firms face in finding qualified workers.
According to an AGC survey released in September, 86 percent of firms report they are having a hard time finding qualified workers to fill available positions.
“While it is great to see growing demand for construction, many firms won’t benefit if they don’t have enough workers to get the job done,” said Stephen E. Sandherr, the association’s chief executive officer. “Without a better approach to attracting and preparing future construction workers, construction projects are likely to get more expensive and take longer to complete.”
The AGC cites several factors as having contributed to the shrinking labor pool, including the aging out of some workers into retirement and those who left the industry during the recession to seek employment in other sectors. In addition, the AGC says fewer workers are entering the profession due to a decline in career and technical training opportunities, including a lack of high school-level programs that expose students to construction as a potential career.