Moody’s Predicts 3.4 Percent Increase in 2022 Construction Spending


Moody’s Investors Services is projecting a modest increase in overall construction spending for 2022, based in part on anticipated Congressional passage of the proposed federal infrastructure spending bill.

Stable residential construction activity and a recovery in nonresidential construction spending are the factors contributing to Moody’s projected 3.4 percent increase in construction spending during 2022.

Aggregates companies will benefit substantially from passage of a multi-year federal infrastructure spending bill, says Moody’s analysts, with one-half of U.S. aggregates demand coming from public infrastructure projects and the remainder equally split between residential and nonresidential construction. If a scalable federal infrastructure investment bill passes, analysts project aggregates price and volume increasing an additional 2 percent.

Cement and concrete ready-mix producers also stand to benefit from passage of such a bill, according to Moody’s. In 2021, U.S. cement producers are operating at more than 83 percent capacity utilization, limiting their ability to increase supply, with imported product totaling 15 percent.

Lumber will be affected least by passage of an infrastructure spending bill, Moody’s says, as its largest demand drive is residential construction. Steel and copper will fare slightly better since the Biden Administration’s proposed plan includes green initiatives that are highly reliant on metals.

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