Heavy Construction Spending Rose 0.9% in May

July 14, 2011

Heavy construction spending increased 0.9% in May after five consecutive month to month drops. Heavy construction spending remains stalled at a high level with only brief small changes in the activity level from 2008 through 2012. Added spending for power and sewer drove the May gain. But these gains are counter to the current declining trend in these markets and are unlikely to persist. Overall, heavy spending is expected to be sluggish through 2012 but will recover to the 2009 level next year. Congress appears committed to maintain but not to increase highway funding through 2012. Average growth in the private economy has set off recovery in the communications market and will initiate recovery in the water and sewer market early in 2012. Heavy construction spending is forecast to decline 4.6% in 2011 and then rise 5.0% in 2012.

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Source: Reed Construction Data