Sources: Associated General Contractors of America, Washington, D.C.; CP staff
Analyzing new federal government data on construction spending through November, AGC confirms that overall 2014 project activity was set to modestly outpace 2013 totals. Figures released January 2 coincide with association members’ push for action on a series of federal infrastructure programs, including funding for highway and transit upgrades, plus clean water initiatives.
November numbers, notes AGC Chief Economist Ken Simonson, reflect “the seesaw pattern that characterized residential, private nonresidential and public construction throughout 2014. Overall construction spending dipped from an upwardly revised October total as residential building advanced but private and public nonresidential spending both retreated.”
Construction spending in November totaled $975 billion at a seasonally adjusted annual rate, down 0.3 percent from the October total but 2.4 percent higher than in November 2013, he adds. Private residential spending climbed 0.9 percent from October but slipped 0.5 percent from a year earlier, while private nonresidential spending dropped 0.3 percent for the month but rose 4.7 percent year-over-year. The third component of the November total—public construction spending—tumbled 1.7 percent from the prior month but was 3.2 percent higher than in November 2013.
“Month-to-month figures tend to fluctuate a lot; in addition, the first estimates are often revised substantially,” Simonson explains. “Totals that combine several months give a truer picture of underlying trends. In this case the image is more uniformly positive: total spending on all three components increased during the first 11 months of 2014 combined compared with the year-to-date period in 2013. Both the monthly variability and the overall upward trend are likely to continue through much of 2015.”
Total January–November 2014 spending was 5.7 percent above the same period in the prior year. Private residential spending rose 4.9 percent, while private nonresidential construction increased 10.8 percent. Public outlays for construction grew by 1.1 percent as state and local governments boosted spending by 1.6 percent, more than offsetting a 4.0 percent decline in federal construction expenditures.
AGC officials said the new spending data coincides with members’ preparation to lobby Congress and the Obama administration to fund needed transportation and clean water programs. “The president and Congress can demonstrate their ability to work together by enacting measures that will boost economic growth, improve our aging infrastructure and help stabilize the erratic construction sector,” affirms AGC CEO Stephen Sandherr.