Construction Forecasts

News & Analysis

Heavy Construction Spending Rose 0.9% in May

07/11/2011 by Jim Haughey, RCD Chief Economist

Heavy construction spending increased 0.9% in May after five consecutive month to month drops. Heavy construction spending remains stalled at a high level with only brief small changes in the activity level from 2008 through 2012. Added spending for power and sewer drove the May gain. But these gains are counter to the current declining trend in these markets and are unlikely to persist. Overall, heavy spending is expected to be sluggish through 2012 but will recover to the 2009 level next year. Congress appears committed to maintain but not to increase highway funding through 2012. Average growth in the private economy has set off recovery in the communications market and will initiate recovery in the water and sewer market early in 2012. Heavy construction spending is forecast to decline 4.6% in 2011 and then rise 5.0% in 2012.

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

  Monthly Figures*
(latest actual values)
Annual Figures
  Actual Forecast
  Apr-11 May-11 2007 2008 2009 2010 2011 2012
Transportation (% change is period
versus same period, previous year)
35.796 35.749 31.697 35.457 38.090 39.659 36.994 39.075
-16.5% -12.2% 13.6% 11.9% 7.4% 12.3% -6.7% 5.6%
Communication 18.124 17.660 27.490 26.537 19.711 17.983 18.070 19.688
  0.1% -3.6% 23.6% -3.5% -25.7% -8.8% 0.5% 9.0%
Power 77.902 80.740 65.955 80.411 88.627 82.110 79.163 77.000
  11.8% 16.7% 56.2% 21.9% 10.2% -7.4% -3.6% -2.7%
Highway 75.910 74.749 76.727 57.241 81.578 82.523 78.041 85.300
  -7.7% -7.0% 6.9% 5.3% 1.0% 1.2% -5.4% 9.3%
Water and Sewer 36.339 37.098 40.655 42.494 40.106 40.782 37.937 41.713
  -9.4% -8.1% 6.6% 4.5% 91.0% 1.7% -7.0% 10.0%
Conservation & Development 7.131 7.381 5.252 5.246 5.633 6.752 7.274 7.550
  9.2% 11.9% 3.0% -0.1% 7.4% 19.9% 7.7% 3.8%
Total 251.202 253.377 247.776 270.937 273.745 269.808 257.478 270.325
  0.0% 1.4% 19.5% 9.3% 1.0% -1.4% -4.6% 5.0%

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
The total includes some miscellaneous buildings.
Actuals: U.S. Census Bureau, Department of Commerce (put-in-place investment figures).
Forecasts and table: Reed Research Group.


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