January construction spending increased 1.7% to $1.52 trillion, the U.S. Census Bureau reports. Compared with January 2020, spending grew 5.8%.

The growth was due mainly to the residential construction sector, where spending soared 21.1% year-over-year and 2.5% from December.

Nonresidential spending inched upward 0.9% from December, but declined 5.0% from January 2020. Private nonresidential spending dipped 10.1% year-over-year and increased 0.4% from December—reaching its second-lowest level in more than three years, according to the Associated General Contractors of America.

The AGC also reported that construction firms “are being squeezed by rising materials prices, particularly for lumber and steel, yet are having a hard time increasing what they charge to complete projects.”