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Given the increases in both spending and investments , skies may be clearing for the nonresidential construction sector. shows that contractors may start to see advancements in the planning of new projects: reported that private non-residential projects like gas and oil well drilling, for example, jumped 1.0%, and state and local government construction saw a 0.6% increase in spending and planning.

This progress is unexpected, given the overall decrease in industry-wide spending of 0.6% in the previous month.

But this development, however, is limited almost exclusively to the commercial sector. reported that while September brought drastic changes in nonresidential numbers, 鈥渋nvestment in residential construction was down, with spending on single-family projects dropping 2.6%.鈥澛

Spending, in this situation, the cost of labor, materials, architectural and engineering work, overhead costs, interest and taxes paid during construction, and contractors’ profits. Contractors involved in these nonresidential projects from the amount of spending in these areas 鈥 it means there is work to be done.

Planning, as it pertains to construction trend watches, includes breaking down the specific steps of a project, establishing key players in its completion, and assigning important tasks.

The , a tool used to measure nonresidential building planning, helps us understand what the planning surge means.

鈥淭he sustained upward trajectory in the Momentum Index shows optimism from owners and developers that projects will continue to move forward, even with rising concerns of an economic recession,鈥 says Dodge Senior Economist Sarah Martin.聽

data demonstrates that nonresidential building planning increased a whopping 9.6% in October.

Buy America requirements could hurt infrastructure spending improvement

Unfortunately, not all nonresidential building sectors have seen recent improvements. Transportation infrastructure investments, though technically nonresidential, are not seeing improvement from previous months.聽

This could partially be due to recent updates of , an act governing purchases related to rail and road transportation.聽

Stephen E. Sandherr, the chief executive officer of , says that 鈥淒emand remains strong for a range of nonresidential construction segments despite supply chain challenges and rising interest rates. But transportation infrastructure investments would likely have been higher if it wasn鈥檛 for the inevitable regulatory confusion that comes with the new Buy America requirements.鈥

Sandherr, in this statement, is referring to the ter that came out on November 7, 2022, from Buy America that states: 鈥淔or grants obligated on or after November 10, 2022, FTA [] will add construction materials to the categories of products that must be manufactured in America on federally funded transit infrastructure projects.鈥

These new regulations could make it increasingly difficult for contractors to obtain materials during a time when the supply chain is already dwindling.

Requiring construction materials to be manufactured in the U.S. for federally funded infrastructure projects is a tall order, and contractors will have to jump through hoops to fulfill . And there鈥檚 likely to be no shortage anytime soon of federally funded infrastructure projects due to Biden鈥檚 infrastructure bill, a $1 trillion allotment toward critical infrastructure.

Overall, it鈥檚 going to be hard for contractors to predict the future of the industry as things seem to be in a state of rapid flux. It will be increasingly important for professionals to familiarize themselves with mortgage rate volatility, as things in the future, but it鈥檚 hard to say for sure. Knowledge of the supply chain鈥檚 progress will also be vital, as some contractors are being faced with shortages.

What we do know is that nonresidential construction projects are in demand, so as long as wrinkles in the supply chain can be ironed out to make Buy America鈥檚 rules easier to follow, there shouldn鈥檛 be a slowdown in work for that market.