Construction Spending Rises to 2-1/2 Year High
Published August 6, 2012
According to data released by the Associated General Contractors of America, construction spending in June rose to a 2-1/2 year high as double-digit percentage increases in private residential and nonresidential construction more than offset an ongoing downturn in public construction.
Association officials said they expect the disparity between private and public construction is likely to persist and urged policy makers to put more funding into infrastructure projects.
“The June spending gains come on top of upward revisions to May and April totals, reinforcing the notion that private construction is now growing consistently,” said Ken Simonson, the association’s chief economist.
“Even more encouraging, the improvement is showing up in a wide range of residential and nonresidential categories.”
Simonson noted that total construction spending gained 0.4% for the month and 7.0% year-over-year. Private nonresidential spending climbed for the fourth consecutive month and was 14% higher than in June 2011.
Residential construction increased 1.3% for the month and 12% year-over-year, with new multifamily construction soaring 3.4% and 49%, respectively, and single-family homebuilding up 3.0% and 19%.
“Private nonresidential and multifamily construction should continue to grow in the second half of 2012 and beyond,” Simonson predicted. “Single-family homebuilding also should top last year’s figures, although progress may not occur every month. As a result, total construction spending in 2012 will be positive for the year for the first time since 2007 even though public construction will remain in the doldrums.”
Association officials said construction growth will remain unbalanced, however, unless lawmakers enact more funding for essential water, wastewater and other infrastructure projects.
To read the Associated General Contractors of America news release click here.