Construction Economics
Construction March Spending Up Vs. Feb., Year-Earlier Levels
Construction spending edged up a bare 0.3% in March from February’s level but climbed a stronger 8% year over year, the Commerce Dept.’s U.S. Census Bureau says.
Commerce’s latest monthly report on completed construction, released on May 2, says that the estimated value of projects finished in March totaled $1.137-billion annual rate, seasonally adjusted.
Residential construction put in place in March rose 1.5% month-to-month, to a $441.8-billion annual rate and also increased 7.6% compared with the March 2015 figure, the Census Bureau reported.
Nonresidential projects slipped 0.4% in March versus February’s level, to a $695.7-billion rate but the total was up 8.3% year over year.
Half of the 16 nonresidential segments posted month-to-month gains in March, including commercial buildings, up 1.2%; and manufacturing, up 2%. Areas showing double-digit increases from March 2015 included lodging, up 27.7%; offices, up 19.5%; and highways and streets, up 18.8%. Ken Simonson, the Associated General Contractor of America's chief economist, said that the federal surface transportation bill enacted in December is starting to have an impact on highway demand.
Sectors recording declines from February included office buildings, down 1.3%; power, down 3.2%; and educational facilities, down 0.6%. Just four segments were off compared with March 2015: public safety, water supply, conservation/development and manufacturing.
The Census Bureau also said that private construction climbed 1.1% month to month and 8.5% from the year-earlier total. Public-sector construction dipped 1.9% versus February but was up 6.7% year over year.
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AGC's Simonson said in a statement, "Construction should be a significant contributor to economic growth in the remainder of 2016 and beyond." Continuing a theme that AGC has been sounding for months, he added that many contractors "are worried about finding enough qualified workers to meet demand."
Anirban Basu, Associated Builders and Contractors chief economist, said in a statement, "While the last several months have failed to deliver significant spending growth, many contractors indicate that they remain busy and that backlog levels are satisfactory." But Basu added that even stronger results could have been expected, given increases in employment, large foreign capital inflows to the U.S., and low interest rates. ABC focuses on construction's nonresidential sectors.
