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Construction spending increased year-over-year, despite a decline between July and August to an annualized rate of $837 billion, according to an analysis of new federal data released by the Associated General Contractors of America. Association officials noted a growing demand for residential, lodging and education construction in particular offset drops in public construction spending.
Stephen E. Sandherr, AGC’s chief executive officer, noted a 0.6-percent decline in construction spending for the month but an increase of 6.5 percent from August 2011 to August 2012. Private residential spending increased by 0.9 percent compared to July and was up 17.8 percent during the past 12 months. Private nonresidential construction, however, declined by 1.7 percent for the month, but remains up 7.2 percent for the year. Public construction declined 0.8 percent in August and 3.5 percent year-over-year.
Within the private sector, multi-family construction experienced the largest monthly and annual gains, increasing by 3.7 percent for the month and 44.8 percent for the year. Single-family construction was up 2.8 percent for the month and 20.8 percent for the year. Lodging and education construction experienced the highest rate of annual growth within the private nonresidential sector, up 33.7 and 22 percent respectively, even as spending on the two segments declined by 0.1 and 0.9 percent for the month.
Power and energy construction—the largest private nonresidential type—fell for the sixth month in a row in August, by 3.7 percent compared with July. However, the total rose 12.3 percent year-over-year, due in part to oil and gas activity. Manufacturing construction declined 0.7 percent but remains 6.1 percent higher compared to August 2011.
Public construction continues to decline. Highway and street construction spending decreased 0.6 percent in August but was up 3.6 percent year-over-year, while educational construction spending decreased 3.4 percent and 7.0 percent respectively.