April 2008 construction spending totaling $1.12 trillion at a seasonally adjusted rate is down 0.4 percent from the previous month and 3.9 percent from April of 2007, according to a recent report by Kenneth Simonson, chief economist, Associated General Contractors of America, who says the decline is present in spite of noticeable growths in the nonresidential construction spending.
“Public construction spending slipped 0.3 percent for the month but rose 6.8 percent from April 2007,” Simonson says. “Private residential spending plunged 2.3 percent and 21 percent and private nonresidential spending climbed 1.6 percent and 15 percent among private nonresidential categories.”
Notable growths in the nonresidential category include lodging, up 7.6 percent from March and 45 percent from April 2007, manufacturing climbed 3.5 percent and 25 percent, power climbed 2.9 percent and 33 percent, office construction grew 0.5 percent and 15 percent, and commercial construction (retail and warehouses) grew 1.9 percent from the previous month but only 0.3 percent from April 2007.
Notable price increases for construction materials include asphalt and aggregate, roofing products and metal wall panels. The Institute for Supply Management reported price increases in May for aluminum, copper wire, diesel fuel, freight and fuel surcharges, and both stainless and structural steel. One Data DIGest reader has reported a 40 percent increase in the price of a steel guardrail since February and a 23 percent jump for concrete barrier rebar.
The cost of vinyl products including siding, flooring, plastic pipes, and vinyl windows is also on the rise on account of a number of increases for vinyl chloride resin for polyvinyl chloride (PVC). The increase of natural gas, a feedstock for PVC, to its highest level since December 2005 in the wake of Hurricanes Rita and Katrina is partly to blame.