Construction Starts On The Rise
Total construction starts rose 9% in February to a seasonally adjusted annual rate of $1.013 trillion. Gains for February rose in the Midwest, South Atlantic and West regions, but fell in the Northeast and South Central, according to recent information (03/16/2022) from Dodge Data & Analytics.
- Year-to-date, total construction was 14% higher in the first two months of 2022 than in the same period of 2021
- Nonresidential building construction starts jumped 39% in February
- Utility and gas plant starts rose 66% over the month
- Nonresidential building starts rose 32% in February to a seasonally adjusted annual rate of $385.6 billion
- Commercial starts were up 17% in February
- Institutional starts rose 12% in February
- Manufacturing starts advanced 143% on a 12-month rolling sum basis
Local, state, and federal spending is expected to drive construction activity in 2022. An influx of government spending will spur new opportunities, but will companies have enough workers to perform them?
Passed in March 2021, the $1.9 trillion American Rescue Plan Act contains $10 billion for critical capital projects to provide communities with access to high-quality modern infrastructure. Many of these projects should kick off in 2022.
More recently, the Infrastructure Investment and Jobs Act which passed on November 6, 2021 directs $550 billion in new federal funding to transportation, water, and power infrastructure. Projects funded by this Act are expected to ramp up in the second half of 2022. Bidding on that work is currently underway.
Despite the good news, challenges remain:
- Construction starts for highways and bridges each fell by less than 1% in February
- Environmental public works starts fell 23%
- Domestic producers seek more control over their supply chains
- Other sectors still struggling to gain ground
- High material prices and worker shortages dampen progress
- Industry continues to weather the ongoing effects of the COVID-19 pandemic
- Conflict in Ukraine continues to have an adverse effect on costs
Although these challenges will not completely disappear in 2022, industry leaders and economists are optimistic that some may ease.
Looking forward, these numbers provide clear and actionable opportunities for both small business and enterprise firms. With over 25 years of experience in various industries, Commercial Capital Company provides equipment financing solutions for decision makers which enable them to build successful businesses and thriving communities.
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If you’re contemplating purchasing new equipment, please feel free to call us or stop by the office for a consultation. We have flexible lease options with competitive rates. We’ve helped thousands of companies grow their businesses for over two decades. Discover how we may help your business grow and succeed.
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