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Construction Spending Edges Lower, Restaurants Boost Tech Investments, Shipping Detour Planned Near Collapsed Bridge

Construction Spending Edges Lower, Restaurants Boost Tech Investments, Shipping Detour Planned Near Collapsed Bridge

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Construction Spending Edges Lower

U.S. construction spending decreased in February by a slight 0.3% from the prior month, even as overall residential and commercial investment gained 10.7% from a year earlier, led in large part by a boost in single-family housing, the Commerce Department reported Monday.

February’s overall project spending totaled just under $2.1 trillion, remaining healthy by historical standards, as the government reported that U.S. construction year-to-date is outpacing year-earlier levels by 11.9%.

Investment in single-family housing construction topped $901 billion in February, rising 0.7% for the month and increasing 6.3% from a year earlier. Multifamily investment, at $133.2 billion, dropped 0.2% for the month but still rose 6.1% from a year earlier.

Most nonresidential categories posted small monthly declines, though the February total of $716 billion for nonresidential projects remained 12.6% higher than a year earlier. Notable year-over-year gainers included manufacturing at 31.8%, religious facilities at 21.6%, educational projects at 21.4%, healthcare buildings at 10.7%, amusement/recreation venues at 9.5% and power generation projects at 6.9%.

Analysts at research firm Oxford Economics noted that private nonresidential construction spending fell in February at its highest monthly rate in three years, though the decline from January was just 0.9%.

“On the bright side, private residential investment advanced even faster than in the prior month, with single-family homebuilding leading the way and multifamily construction backtracking slightly,” Oxford Economics Lead U.S. Economist Bernard Yaros said in a statement Monday. 

Restaurants Boost Tech Investment 

Technologies that helped some restaurants survive the COVID-19 pandemic will probably increase in coming years, as operators expect to bolster their investments in efficiencies that shape how eateries are configured, staffed and potentially expanded through new locations.

A newly released National Restaurant Association survey found 48% of operators nationwide made investments in technology to enhance the customer experience during 2023, and 60% plan to do so in 2024. Similar increases are expected among operators looking to make their service and kitchen areas more efficient or strengthen cybersecurity.

Restaurants have responded to customers’ increasing preference for ordering food online or through mobile apps for pickup or delivery, and 73% of surveyed operators now say their restaurant is more efficient and productive than before the pandemic. About the same percentage, 76%, said technology gives them a competitive advantage, “but many believe their restaurants could do more to keep up on the tech front,” the trade group said in its survey report.

Several tech areas targeted for new investment this year are connected to operators’ response to staffing shortages, including more use of on-site tablets and kiosks for customer self-ordering and payments. More operators are looking to deploy artificial intelligence and other technology geared to in-house functions, including inventory management, recruitment, scheduling and training.

While most age groups are using existing technologies, the survey found some significant generational differences in how customers wish to receive and pay for food in the future. While 50% of surveyed millennials aged 28-43 said they would make use of drone deliveries, that percentage fell to 14% among baby boomers aged 60-78. 

Shipping Detour Planned Near Collapsed Bridge 

Baltimore authorities plan to establish a temporary detour for essential commercial vessels near the collapsed Francis Scott Key Bridge, in a bid to alleviate expected supply chain disruptions in one of the nation’s busiest cargo ports.

The port’s Unified Command, which includes the U.S. Coast Guard, Army Corps of Engineers and state transportation and law enforcement agencies, announced plans to create an alternative route on the northeast side of the port’s main channel for commercial ships, though no specific timetable was established as of Monday.

“This will mark an important first step along the road to reopening the port of Baltimore,” Coast Guard Capt. David O’Connell, on-scene coordinator for the Unified Command, said in a statement. “By opening this alternate route, we will support the flow of marine traffic into Baltimore.”

The statement said the temporary channel will be marked with government-installed lighting. Authorities have already established a 2,000-yard safety zone around the bridge to protect vessels and the surrounding marine environment, and vessel operators accessing the area must obtain permission from port authorities.

Commercial traffic has been blocked since last week’s collapse that killed six construction workers after the bridge was struck by a cargo ship. Cleanup of debris is underway as the cause of the crash remains under investigation. Full repairs to the bridge could be years away and cost at least $400 million, according to analysts queried by the Associated Press.

The Baltimore port imported $58.8 billion worth of goods in 2023, making it the fifth-largest port on the East Coast by cargo dollar volume and the 15th largest overall in the U.S., according to the Commerce Department. It is among the nation’s busiest ports for the processing of cars, construction equipment and building supplies such as plywood, gypsum and lumber.

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