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July Construction Spending Reaches Four-Year High

Total construction spending reached a four-year high as private construction activity increased while public spending declined, according to an analysis of federal data by the Associated General Contractors of America (AGC).

September 04, 2013

Total construction spending reached a four-year high as private construction activity increased while public spending declined, according to an analysis of federal data by the Associated General Contractors of America (AGC).

“The patterns seen earlier this year reappeared in July, with strong year-over-year gains in single- and multifamily building, a range of results for private nonresidential categories, and deepening downturns in most public segments,” said Ken Simonson, AGC’s chief economist. “These trends are likely to hold for the remainder of 2013.”

Construction put in place in July totaled $901 billion, which is the highest mark since June 2009. This is an increase of 0.6 percent from the month before and 5.2 percent from July 2012. Totals for May and June were revised up, implying a stronger second quarter for the overall economy than the government previously reported.

Private residential spending rose 0.6 percent for the month and 17 percent from July 2012. New single-family construction climbed 0.5 percent in July and 29 percent from a year ago. New multifamily spending edged up 0.1 percent in July and advanced 39 percent year-over-year.

Private nonresidential spending gained 1.3 percent in July and 2.0 percent year-over-year, Simonson observed. Components with substantial increases since July 2012 included lodging, warehouses, and power. However, there were decreases in private health care construction and communication.

Public construction spending slipped 0.3 percent for the month and 3.7 percent over 12 months. The two largest public components both dropped: highway and street and educational.

Association officials urged policymakers in Washington to enact federal spending bills by Sept. 30, 2013 in order to avoid costly interruptions to federally funded construction projects. They said even a short lapse in appropriations could be very disruptive to construction schedules for infrastructure and building projects.

“Congress and the administration shouldn’t play chicken with vitally needed infrastructure,” said Stephen E. Sandherr, AGC’s CEO. “Shutting down a project, even for a day, can be very damaging to finishing it on time and keeping key workers on board.”

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