Construction spending decreases
| March 15, 2012 |
Construction spending was down less than 0.1 percent in January after improvements in December and November, according to a new analysis of federal data released by the Associated General Contractors of America.
AGC of America reported all forms of residential construction did well for the month and year-over-year, while private nonresidential spending was mixed and public construction declined.
“The strong gains in single-family homebuilding in December and January probably have a lot more to do with the unusually mild weather compared to year-ago conditions, than surging demand for new homes,” said Ken Simonson, the association’s chief economist. “Meanwhile, private nonresidential activity dropped after an exceptionally large jump in December, but the January total was still up an impressive 17 percent from a year ago.”
Simonson said private residential spending, which climbed 1.8 percent for the month and 6.7 percent compared with January 2011, was higher across-the-board. New single-family construction posted gains of 2.5 percent for the month and 5.5 percent over 12 months; new multi-family construction was up 0.7 percent and 20 percent, respectively; and improvements to existing residential structures moved up 1.3 percent and 6.4 percent.
Private nonresidential spending was at the second-highest level since December 2009, despite the 1.5 percent pullback in January, Simonson noted. Power construction, which is the largest private category and includes shale-related activity as well as traditional and renewable electric power, dropped 1.8 percent in January but was up 28 percent over 12 months.
Simonson also cited large year-over-year gains for manufacturing construction (-5.9 percent for the month, +38.5 percent over 12 months); commercial construction, which includes retail, warehouse and farm (-1.0 percent for the month, +8.5 percent over 12 months); and health care construction (up 1.7 percent and 12.5 percent, respectively).
Simonson said public construction spending was down in January, declining 0.2 percent from December and 0.5 percent from January 2011. Highway and street construction, the largest public category, was also down 0.2 percent for the month but climbed 4.5 percent year-over-year. Transportation spending for comprising transit, ports, airports and passenger rail was 2.5 percent for the month but tumbled 10 percent from a year ago.