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Heavy Engineering Construction Spending Edged Higher in October

0 4771 Market Intelligence

Heavy engineering (non-building) construction spending inched up 0.2% on a seasonally adjusted (SA) basis in October after advancing a more solid 1.1% in September. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending increased 8.5% over the same period in 2011.

Heavy engineering (non-building) construction spending inched up 0.2% on a seasonally adjusted (SA) basis in October after advancing a more solid 1.1% in September. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending increased 8.5% over the same period in 2011.

Three of the six major heavy engineering spending categories increased in October. Transportation had the strongest increase, catapulting 5.3% higher following a robust 2.6% advance the previous month, and on a year-to-date basis, was up 6.2% from a year ago. Power construction spending rose 1.6%, up a bit from September’s 1.3% increase, but 28.8% higher on a year-to-date basis. Water and sewer construction spending moved up a modest 0.5%, its third consecutive monthly increase, but was down 3.7% on a year-to-date basis.

U.S. Heavy Engineering (Non-Building) Construction
(billions of U.S. current dollars)

  Monthly Figures (1)
(latest actual values)
3-Month Moving Average Year-to-Date (NSA)
  Aug-12 Sep-12 Oct-12 Aug-12 Sep-12 Oct-12 Jan-11 to
Oct-11
Jan-12 to
Oct-12
Transportation 38.4 39.3 41.4 38.0 38.5 39.7 29.1 30.8
  Month-over-Month
  % Change
1.3% 2.6% 5.3% 1.0% 1.5% 3.1%    
  Year-over-year
  % Change (NSA)
7.6% 13.3% 23.4%       -9.7% 6.2%
Communication 16.7 17.8 16.6 17.2 17.3 17.1 14.3 13.9
  -3.5% 6.6% -6.9% -0.4% 0.8% -1.4%    
  -4.8% -8.0% 3.8%       -0.1% -2.5%
Power 89.4 90.6 92.0 90.1 90.6 90.7 59.0 76.0
  -2.8% 1.3% 1.6% -1.0% 0.6% 0.0%    
  18.3% 19.4% 14.6%       -3.5% 28.8%
Highway 79.9 78.7 76.9 81.0 79.8 78.5 66.5 67.8
  -1.3% -1.4% -2.3% -0.2% -1.5% -1.7%    
  1.4% -6.3% -2.1%       -5.1% 2.0%
Water and Sewer 34.3 34.9 35.1 34.0 34.2 34.7 30.7 29.5
  2.4% 1.6% 0.5% -1.3% 0.6% 1.5%    
  -6.8% -4.1% -5.4%       -11.8% -3.7%
Conservation & Development 6.3 6.6 6.5 6.1 6.3 6.5 6.3 5.2
  7.8% 5.3% -1.5% -0.8% 3.0% 3.7%    
  -18.9% -10.0% -10.1%       6.5% -17.7%
Total (2) 265.0 268.0 268.5 266.3 266.8 267.1 205.8 223.3
  -0.9% 1.1% 0.2% -0.5% 0.2% 0.1%    
  4.6% 2.9% 5.8%       -5.8% 8.5%

(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures).
(2) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Calculations: Reed Construction Data

Heavy engineering construction continues to contend with limited government funding for new projects. In some cases, public-private partnerships have been created to bridge the gap in funding. At the same time, companies engage in some heavy construction projects on their own without government funding (power and communication are two major areas of spending). The Reed forecast for heavy engineering construction spending is an increase of 7.7% in 2012, 5.4% in 2013, and 6.7% in 2014.

U.S. Heavy Engineering (Non-Building) Construction
(billions of U.S. current dollars)

  Actual Forecast
  2009 2010 2011 2012 2013 2014
Transportation 36.7 38.3 34.9 37.4 43.6 47.6
   Year-over-year % Change 3.5% 4.5% -9.1% 7.4% 16.4% 9.2%
Communication 19.8 17.7 17.5 17.2 18.7 20.0
-25.4% -10.2% -1.1% -1.8% 8.4% 7.0%
Power 88.9 77.9 74.0 92.9 95.7 103.4
  9.6% -12.3% -5.1% 25.6% 3.0% 8.0%
Highway 82.2 82.5 78.9 79.2 82.2 86.2
1.0% 0.4% -4.4% 0.4% 3.8% 4.8%
Water and Sewer 40.3 41.3 36.8 35.5 36.2 38.0
  -5.1% 2.5% -11.0% -3.5% 2.1% 4.8%
Conservation & Development 5.8 7.2 7.4 6.3 6.7 7.0
9.9% 24.7% 2.8% -14.9% 6.1% 4.8%
Total (1) 273.5 265.0 249.4 268.5 283.1 302.1
0.5% -3.1% -5.9% 7.7% 5.4% 6.7%

(1) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

by Bernie Markstein last update:Dec 21, 2012

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