Construction spending split in October

According to data recently released by the Census Bureau, October’s construction industry was split: homebuilding and public construction faired extremely well, while private, nonresidential construction sunk lower than expected.

“Construction was a tale of two industries in October,” said Kenneth Simonson, chief economist for the Associated General Contractors of America. Private residential construction jumped nearly 13 percent from October 2002 and public construction was up a robust 6.6 percent.

Some of the sectors that did the best include single-family home construction, which was up 18 percent from a year ago, and multi-family home building, which was up seven percent. Public projects also did well, with highway and street construction up 9.5 percent, and sewage and waste disposal jumping 17 percent. Public office construction went up 11 percent.

Private nonresidential construction, on the other hand, was a disappointment, Simonson said. The value of manufacturing construction put in place fell 6 percent from an “already depressed” level in October 2002.

Some of the sectors that didn’t do so well included office construction, which was down 12 percent from a year ago, communication construction, which was down 13 percent, and private transportation facilities, which fell 12 percent.

But the outlook isn’t extremely stark for 2004, Simonson said.

“The broad economy recovery will eventually help the lagging parts of private nonresidential construction,” he said.