ACHRNEWS

Construction Spending Up for September

November 14, 2011
ARLINGTON, Va. — Construction spending increased by 0.2 percent between August and September but was down 1.3 percent compared to September 2010, the Associated General Contractors of America (AGC) reported in an analysis of new Census Bureau data. Association officials noted that growing declines in public sector activity continue to offset modest increases in private sector demand for construction.

Ken Simonson, the AGC’s chief economist, noted that the total, seasonally adjusted annual construction spending rate in September 2011 was $787.2 billion, compared to $786 billion in August, and $797.3 billion in September 2010. Private sector construction spending increased by 0.6 percent between August and September from $499 billion to $501.8 billion, and is up 3.9 percent compared to last year. Meanwhile, public construction spending went from $287.0 billion in August to $285.3 billion in September, a 0.6 percent decrease, and is down by 9.2 percent compared to last year.

“In less than a year’s time, the public sector has gone from propping up the construction industry to holding,” said the association’s chief economist, Ken Simonson. “Even as local and state budgets continue to contract, the federal government is winding the stimulus and base realignment programs down and cutting billions from key water and facility investment programs.”

Anirban Basu, chief economist of Associated Builders and Contractors had a similar analysis. “Many of the segments experiencing the largest declines in nonresidential construction were those heavily financed and demanded by the public sector,” said Basu. “In contrast, privately financed construction continues to expand, such as commercial and manufacturing construction.”

ABC pointed out that one-half of the 16 nonresidential construction subsectors posted increases for September, including health care, up 2.2 percent; communication, 2.2 percent higher; sewage and waste disposal, up 1.8 percent; and lodging, up 1.7 percent; and three subsectors experienced increased spending from one year ago with power construction spending up 19.3 percent; commercial construction 9.7 percent higher; and manufacturing construction spending up 4.7 percent. The association also pointed out that residential construction spending increased 0.7 percent for September, but is down 1.1 percent over the past 12 months.

Publication date: 11/14/2011