Construction spending in the private sector in September outpaced public sector investment in infrastructure and other projects, according to an analysis of new government data by the Associated General Contractors of America. Association officials urged members of Congress and the Trump administration to include new funding for roads, bridges, clean water and other important infrastructure as part of any new tax reform measure.
“The ongoing economic expansion is a favorable sign for private residential and nonresidential construction,” said Ken Simonson, the association’s chief economist. “But lawmakers continue to underfund public investment.”
Construction spending in September totaled $1.219 trillion at a seasonally adjusted annual rate, an increase of 0.3 percent from the August total and up 2 percent from a year earlier, Simonson said. He noted that while a good number of categories had gains for the year, total spending on manufacturing, water systems, highway and street, and commercial construction experienced significant declines for the year.
Private nonresidential spending declined by 0.8 percent in September and was 3.8 percent below the September 2016 level. The largest private nonresidential segment was power construction (including oil and gas field and pipeline projects), which declined by 1.4 percent for the month and 9.1 percent from September 2016 to September 2017. The next-largest segment, commercial (retail, warehouse and farm) construction, fell 1.0 percent for the month, but was up 11.7 percent year-over-year. Manufacturing construction dropped by 3.6 percent for the month and 20.5 percent from a year earlier. Private office construction decreased 1.1 percent from August and by 7.4 percent since September 2016.
Public construction spending climbed 2.6 percent from the prior month, but is down by 1.6 percent from September 2016 to September 2017. Highway and street construction increased 1.1 percent for the month as more state funding initiatives came online, but is down 7.4 percent from a year earlier. Among other major public infrastructure categories, spending on transportation facilities such as transit and airport construction rose 5 percent for the month, but slipped 1 percent year-over-year; spending on sewage and waste disposal fell by 0.1 percent and 9.7 percent, respectively; and spending on water supply dropped 0.4 percent in September and 8.3 percent year-over-year. Public educational construction was up 5.2 percent in September and up 6.0 percent over 12 months.
Private residential construction spending was flat between August and September, but was up 9.6 percent over the year. Spending on multifamily residential construction grew 0.6 percent in September and 0.9 percent from a year ago, while single-family was up 0.2 percent for the month and 11.9 percent from the September 2016 rate.
Association officials said the fact public sector investments in construction remain down for the year despite overall robust economic growth means maintenance and improvements will lag even as greater economic activity puts more wear on roads, bridges and other public works.
Sandy WilliamsRead more from Sandy Williams
Latest in Steel Products
Ford Pauses Work on $3.5B Battery Plant: Report
Ford Motor Co. said on Monday that it has stopped work at its $3.5-billion project for an electric vehicle (EV) battery plant in Michigan, according to media reports.
USW Taps McCall as New President After Conway’s Passing
The United Steelworkers International (USW) executive board on Tuesday appointed David McCall as the union’s new international president. He will fill the remainder of Tom Conway’s term.
HARDI Members Bullish on Future
Despite economic headwinds in the headlines, the near-term future could prove brighter than expected, according to members of the Heating, Air-Conditioning & Refrigeration Distributors International (HARDI) speaking on the Tuesday, Sept. 26, meeting of its Sheet Metal/Air Handling Council.
AISI: Raw Steel Production Ticks Up
Domestic raw steel output was up slightly for the week ending Sept. 23, according to data released by the American Iron and Steel Institute (AISI) on Monday, Sept. 25.
Worldsteel: Global Output Slides in August
Global steel production tapered off in August vs. July, according to the latest figures from the World Steel Association (worldsteel).