3 October 2016 — According to an analysis by the Associated General Contractors of America, construction spending held steady in August compared to July but is up nearly 5% for the first eight months of the year compared to the same period in 2015. The new spending figures indicate that the industry’s recovery may be at risk, per association officials, and new investments in the nation’s aging water systems and other infrastructure could help offset declining spending in certain types of private construction.
Construction spending in August totaled $1.142 billion at a seasonally adjusted annual rate, unchanged from the previous month. The year-to-date increase of 4.9% for January through August 2016, compared with the same period in 2015, shows that demand for construction projects remains relatively robust despite some recent monthly declines. But the month-to-month figures indicate that demand for construction is no longer growing as it was earlier this year.
Private, non-residential construction spending decreased 0.4% for the month but is up 4.2% year-to-date. The largest private non-residential segment in August was power construction (including oil and gas pipelines), which declined 1.5% for the month but up 2.9% year-to-date. The next-largest segment, manufacturing, dropped by 1.4% for the month and is down 7.4% year-to-date. Commercial (retail, warehouse and farm) construction decreased by 2% in August and climbed 6.9% year-to-date. Private office construction climbed 2.3% for the month and 28% year-to-date.
Private residential construction spending dropped by 0.3% between July and August 2016, but is up 1.4% year-to-date. Spending on multifamily residential construction increased by 2.4% for the month and remains up 13.9% year-to-date, while single-family spending fell 0.9% from July to August and is down 1.5% year-to-date.
Public construction spending declined 2 percent from a month before and dropped by 8.8% year-to-date. The biggest public segment — highway and street construction — decreased by 2.9% for the month and is down 8.3% year-to-date. The other major public category — educational construction — fell by 0.4% in August and dropped 0.8% year-to-date.
Association officials said that the new construction spending figures underscore the need for Congress to pass legislation like the Water Resources Development Act to finance repairs to aging water systems.
For complete details, visit www.acg.org.