Construction Forecasts

News & Analysis

Construction Spending Increases 1.4% in March

05/10/2011 by Jim Haughey, RCD Chief Economist

Construction spending increased 1.4% in March with the housing, nonresidential building and heavy sector all improving. This gain reverses about 20% of the steep drop during the harsh winter weather in December through February. Revised data show a deeper decline during the winter than first reported. The shrinking supply of public construction funds is now being felt on the jobsite. March housing spending was 4% below November but new home construction was nearly steady. Nonresidential building spending also fell 4% from November to March, almost all for institutional buildings. Heavy construction activity dropped 7% over the same period.

Much of the decline since November was a real cutback in public construction, especially buildings financed by municipal governments. This trend will persist well into 2011 as state and local governments are forced to balance their budgets with depressed revenues, exhausted reserves and end of federal stimulus funds on June 30th. The proposed budgets for FY 2011-12 are spending cuts from the current budget year in almost all states.

The Reed Construction Data spending forecast now projects a 2.3% decline in 2011 although spending will be rising steadily before mid-year. The delayed recovery early in 2011 pushes some work into next year raising the gain to 13.7%.

U.S. Total Construction Spending
(billions of U.S. current dollars – annual figures)

  Actual Forecast
  2006 2007 2008 2009 2010 2011 2012
New Residential (% change 476.9 362.3 238.2 141.4 135.8 139.7 188.9
is year vs previous year) -1.7% -24.0% -34.2% -40.6% -4.0% 2.9% 35.2%
Residential Improvements* 145.9 140.2 120.7 119.3 116.8 117.6 134.6
  11.2% -3.9% -13.9% -1.1% -2.1% 0.7% 14.5%
Non-residential Building 339.3 402.8 437.4 379.7 290.9 268.1 299.7
  12.4% 18.7% 8.6% -13.2% -23.4% -7.8% 11.8%
Non-building 207.4 247.8 270.9 270.9 269.8 269.1 280.0
   (heavy engineering) 12.5% 19.5% 9.3% 1.0% -1.4% -0.3% 4.0%
Total 1169.4 1153.0 1067.2 914.1 813.3 794.6 903.2
  6.1% -1.4% -7.4% -14.3% -11.0% -2.3% 13.7%

*Residential Improvements include remodeling, renovation and replacement work.
Source: U.S. Census Bureau, Department of Commerce.
Forecasts and table: Reed Construction Data.


Email

RSS Feed

» return to previous page
10294

Member Comments

Post Your Own Comments 
» Not a member? Register now to become one. Otherwise, login to post your comments on this article.

click here to update your log-in and member information

click here to maintain your company profile & view metrics

Join accessArchitecture Now!
accessArchitecture members get free pre-design leads in exchange for providing project information
Keep Up To Date with eNewsletters
Keep up to date with our variety of complimentary weekly and monthly eNewsletters covering the construction industry.