Construction Economics
Construction Nov. Spending Up Slightly From Oct. Level
Census Bureau report also shows 4.1% gain from year-earlier spending figure
Construction spending in November edged up 0.9% from October’s level, to a $1.182-trillion seasonally adjusted annual rate, which also represented a 4.1% gain year over year, the Commerce Dept.’s U.S. Census Bureau has reported.
In its monthly report on construction put in place, released on Jan. 3, the bureau said that spending for 2016’s first 11 months climbed 4.4% from the same period in 2015, to $1.071 trillion.
Ken Simonson, Associated General Contractors of America chief economist, noted that November’s $1.182-trillion rate is the highest since April 2006.
Simonson said in a statement, “These numbers confirm what contractors have been reporting—that there was no letup in demand last year."
Nonresidential construction moved up 0.8% in November from October’s total and 4.9% year over year, to a $712.4-billion annual rate.
Anirban Basu, Associated Builders and Contractors chief economist, pointed out that nonresidential’s November rate was the strongest in eight years. He said in a statement that that sector’s “momentum should build further.”
Nine of the 16 nonresidential segments recorded monthly spending increases. Lodging saw the biggest upturn among major sectors, a 6.9% gain, to a $29-billion annual rate.
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Education, one of largest segments, was up 2.5%, to a $92.4-billion rate; office construction climbed 2%, to a $76.2-billion rate.
Highway and street construction showed a 1.1% monthly increase, to $94.8 billion.
Among segments that were on the minus side, communication was off 3.8% from October and health care slipped 0.1%.
Five nonresidential segments posted year-over-year gains, paced by lodging, which surged 28.4%; office buildings, which soared 27.5%; and commercial, which rose 12.4%.
Highways and streets moved up, by 10.5%, from the year-earlier rate.
Residential construction increased 1% from October and 3% compared with November 2015, to a $469.7-billion annual rate, the bureau said.
Overall private construction for November rose 1% from the previous month’s level, to an $892.8-billion rate. That level also was a 4.6% gain from November 2015.
November’s public-sector construction spending ticked up 0.8% from October and 2.6% year over year, to a $289.3-billion rate, the Census Bureau reported.
AGC’s Simonson observed that federal infrastructure funding is still weak and that some states have fiscal challenges ahead that may hamper their spending on infrastructure and public-university projects.
ABC’s Basu said that the major near-term uncertainty for nonresidential construction is “whether the new administration will successfully pass an infrastructure package and how quickly such legislation would translate into stepped-up public construction spending.”
