Budget Battle Takes Toll on Public Works
Public construction is starting to feel the impact of the battle over the federal budget deficit and the weak financial position of many state and local governments. In April, public construction was running at a seasonally adjusted annual rate of $282 billion, which was 7.5% below April 2010's pace. It also marked the fourth consecutive month the seasonally adjusted annual rate has declined, according to the U.S. Dept. of Commerce (see chart).
On a year-to-date basis, total public construction through the first four months of this year was $79.2 billion, which was 4.2% below the same period of 2010 (see table). The public sector is being pulled down by its two largest markets: Public school construction through April was down 9.0% from the first four months of last year; during the same period, highway work was down 0.9%, while work for other transportation markets declined 8.0%. Last year, these markets accounted for 62% of all public construction.
Other public markets feeling the impact of budget constraints include a 16.5% decline in public safety work, a 12.8% decline in institutional office buildings and an 8.1% decline in the sewage and waste-disposal markets.
Higher Steel Mill Prices Still Being Felt
Mill prices for structural-steel shapes and concrete reinforcing bar soared to their second-highest level on record earlier this year, according to IHS Global Insight, Washington, D.C. (see p. 20). These higher prices are still working their way through ENR's contractor prices. ENR's 20-city average price for three structural-steel shapes increased 1% this month, its largest increase since last January's 2.7% price hike. ENR's structural prices are now averaging about 7% above June 2010's level. ENR's 20-city average price for rebar has increased 4.5% during the last three months, as prices rebounded from last February's drop.
ENR's Materials Price Indexes
Prices have fallen 1.2%from last April's peak.
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June's 0.5% decline dented this year's significant price hikes.
Prices have jumped 4.5%during the last three months.
Prices have increased steadilyduring the first half of this year.
