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PNC Senior Economist Abbey Omodunbi: Construction Spending Up in April;

Michigan Business Network
June 2, 2023 7:00 AM

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Residential Investment Will Weigh on GDP Growth Through 2023.
  • Construction spending rose 1.2% in April to $1.908 trillion.
  • Residential investment will continue to be a drag on GDP through 2023.
  • Infrastructure spending will provide support to public construction spending over the next decade.

Construction spending rose 1.2% in April to a seasonally adjusted annual rate of $1.908 trillion, above the revised March estimate of $1.885 trillion. On a year-ago basis, the total value of construction put in place was 7.2% higher in April. 

Private residential spending edged up 0.5% on the month driven by a 0.6% increase in new multi-family construction spending. Nonresidential construction spending rose 1.1% on the month and increased 16.8% from a year ago. All major components of private nonresidential construction spending were up on a year-over-year basis. 

Despite the sharp increase in borrowing costs in the past year and subsequent big declines in housing starts, permits, and existing-home sales, construction employment has remained resilient. Construction spending and employment will likely stay solid in the near term due to the strong pipeline of projects currently under construction. The number of projects authorized but not started is near the highest level since 1974. The Infrastructure Investment and Jobs Act of 2021 includes $1.2 trillion in funds which will likely kick in toward the end of the year and boost public construction spending over the next decade.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance, and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.

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