News

Heavy construction spending steady during recession and early recovery

0 162 Market Intelligence

Heavy construction market drivers are balanced between positive and negative. This is consistent with spending trends which have flat for over a year, except for a brief dip early in the recession. Little change is expected through 2011, says Reed Construction Data chief economist Jim Haughey.

Heavy construction market drivers are balanced between positive and negative. This is consistent with spending trends which have flat for over a year, except for a brief dip early in the recession. Little change is expected through 2011. The positive impact of federal stimulus spending and environmentally mandated energy facility spending is approximately offsetting the negative impact of depressed state and local budget balances and much reduced private spending to add facility capacity.

The impact of the initial federal “shovel ready” construction stimulus program is now ebbing. Those funds will be replaced in 2010-11 by delayed spending on transit and power grid projects as well as a likely second stimulus plan finalized early next year.

Key Indicators of the U.S. Market Environment — Dec 2009
Heavy/Engineering Construction
(Driven by demographics and government finances, as well as cyclical factors)

  Year
Ago
Previous
Month
or Qtr.
Latest Level Recent
Trend
Impact
on Const.
Heavy/Engineering
Federal highway trust fund, $ billions
(U.S. Treasury Dept.)
10.604 8.001 Nov 8.501 Low Rising
Electric power capacity utilization rate,
% level (FRB)
81 78 Oct 76 Low Falling
Airline revenue passenger miles,
billions (RCD) (ann. % change)
-10.6 0.6 Nov 2.1 Low Rising
State & local govt. capital spending,
$ billions (U.S. Commerce Dept.)
353 361 Q3 363 Average Steady
State and local government tax receipts,
$ billions (U.S. Commerce Dept.)
1351 1238 Q3 1262 Low Falling
Heavy contractor employment, 000s
(U.S. Labor Dept.)
943 828 Nov 834 Low Rising
Construction equipment shipments,
% change y/y (U.S. Census Bureau)
8.3 -45.6 Oct -46.6 Low Falling

Abbreviations: y/y = year over year; WE = week ending;
FRB = Federal Reserve Board; RCD = Reed Construction Data.
Table: Reed Construction Data and Reed Construction Data - CanaData.

by Jim Haughey last update:Dec 30, 2009

Leave a comment

Or register to be able to comment.