1 November 2016 — According to an analysis by the Associated General Contractors of America, construction spending remained in a yearlong holding pattern in September as declining public outlays offset strong growth in multifamily spending and several private non-residential categories.
Construction spending in September totaled $1.150 trillion at a seasonally adjusted annual rate, down 0.4% from the month before and down 0.2% from September 2015. The year-to-date total for January through September 2016 compared to the first nine months of 2015 remains positive, with an overall increase of 4.4% despite a deterioration in public spending, thanks to gains in private non-residential and residential spending.
Public construction spending declined 0.9% from a month before — the sixth decrease in the past seven months — bringing the year-to-date total for the first nine months of 2016 down 2.2% from the same period in 2015. Public spending on highway and street construction slipped 0.7%; other transportation facilities such as transit and airports dropped 4.8%; sewage and waste disposal slumped 8.9%; water supply fell 8.3%; and conservation and development declined 4.5%.
Private non-residential construction spending decreased 1.0% for the month but is up 7.8% year-to-date. The largest private non-residential segment in September was power construction (including oil and gas pipelines), which declined 1.4% for the month but is up 7.4% year-to-date. The next-largest segment, manufacturing, dropped by 1.5% for the month and is down 2.5% year-to-date.
Private residential construction spending increased by 0.5% between August and September and rose 5.8% year-to-date. Spending on multifamily residential construction increased by 2.0% for the month and 18.8% year-to-date, while single-family spending inched up 0.1% for the month and rose 6.0% year-to-date.
Association officials said declining investments in public infrastructure are undermining the sector’s recovery and urged Congress to act on pending water resources legislation and voters to support ballot measures designed to rebuild aging infrastructure.
For complete information, visit www.agc.org.