Construction Spending Forecast to Increase by 6.5% in 2012
Construction has been the one segment of the U.S. economy which has negatively impacted the steel industry. In order for the domestic steel mills to take capacity utilization rates above the 80% threshold construction would need to begin growing again.
Total construction spending rose 1.5% in December to $816.4 billion, following a 0.4% rise in November. According to the U.S. Census Bureau, total 2011 construction spending was down 2.0% from 2010 due mainly to declines in public construction spending. Public construction for December gained 0.5% to reach an 11-month high. However, total 2011 public spending fell 6.5% due to budget cuts across all levels of government.
Private spending rose 2.1% for the month, with an annual increase of 0.7% for 2011. Nonresidential spending increased 1.7% in December, while 2011 spending was down 4.0%. Total residential construction spending was up 0.7% for December but ended down 1.7% from 2010.
Heavy engineering construction spending rose 2.0% for the fifth consecutive monthly increase in December. However for total 2011, heavy engineering spending fell a slight 0.1% from 2010.
According to Reed Construction Data, their forecast for total construction spending is to increase 6.5% in 2012 and 5.9% in 2013, assuming no recession.
Sources: U.S. Census Bureau & Reed Construction Data