Construction Spending Highest Since December 2009
Construction spending in May registered the highest level since December 2009 at an estimated annual rate of $830.0 billion, 0.9% higher than in April. May 2012’s estimate is 7% higher than the previous year’s, according to the latest report by the U.S. Census Bureau of the Department of Commerce. Already in the first 5 months of this year, construction spending is at $310.5 billion, up 9.4% from the same period in 2011.
Private construction spending gained 1.6% m-o-m to $560.4 billion, mostly due to the gains in residential construction. Residential construction increased 3.0% from April to May while nonresidential construction was gained 0.4%.
Public construction spending dropped 0.4% to $269.6 billion with the educational construction down 3% highway construction down 0.5% April’s estimates. An economist with the Associated General Contractors of America reported “private nonresidential spending climbed for the third month in a row and was 19 percent higher than in May 2011.” The construction economist said that while four private nonresidential categories posted 12-month spending increases of more than 25%, public construction dropped for the fifth consecutive month. Both the two largest segments of public construction - highway and street construction and educational construction - dropped in June.
AGC’s economist expects, “the private nonresidential sector to keep posting hefty gains for the rest of 2012 and beyond…Apartment construction seems sure to remain strong as well. Single-family homebuilding is not as solid but has apparently passed its low point. Together, these categories should mean that total construction spending in 2012 will be positive for the year for the first time since 2007 despite ongoing weakness in public construction.”
Sources: The U.S. Census Bureau of the Department of Commerce, Associated General Contractors of America