Construction spending fell 2.9 percent in April after holding steady in March. The Department of Commerce estimates construction spending was at a seasonally adjusted annual rate of $1.35 trillion—the lowest total since November, says the Associated General Contractors of America.
Public construction spending dropped 2.5 percent from March to $342.1 billion. Private spending fell 3.0 percent month-over-month to an estimated $1,004.1 billion. Private nonresidential spending fell by 1.3 percent and private residential spending by 4.5 percent.
“Bad though these numbers are, construction spending appears sure to shrink further,” said AGC Chief Economist Ken Simonson. “In our latest survey, 40 percent of contractors report that an upcoming project has been canceled. But this is a great time to undertake needed infrastructure projects, with more availability of labor, lower materials costs and record-low borrowing costs for many public agencies.”
Simonson noted that 10 out of 12 public and 10 out of 11 private nonresidential construction categories declined from March to April. He added that highway and street construction tumbled by an especially steep amount, 5.2 percent.
“Although there have been scattered reports of acceleration in highway spending, many state and local transportation departments have been postponing or canceling projects as fuel-tax and toll revenues plummet,” Simonson said. “The highway construction downturn is likely to intensify in future months because, in many states, April is normally the first month of significant highway spending following winter shutdowns.”
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