Heavy engineering (non-building) construction spending fell 0.6% on a seasonally adjusted (SA) basis in July after dropping 1.1% in June. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending was up 10.7% from a year earlier. Transportation was the only major heavy engineering spending category to increase for the month, rising 1.3%. It was also the fourth consecutive monthly increase for the category, but left it only 2.3% higher on a year-to-date basis over the same period last year. Two other construction spending categories were up compared to a year ago—power (+34.2%) and highway (+4.6%). Conservation and development, which should be noted is a relatively small category—$6.0 billion in July at a seasonally adjusted annual rate (SAAR), dropped sharply in July, down 3.1%, and in June, down 3.5%. Also, on a year-to-date basis, it was down 19.3% from 2011.
U.S. Heavy Engineering (Non-Building) Construction | ||||||||
| Monthly Figures (1) (latest actual values) |
3-Month Moving Average | Year-to-Date (NSA) | ||||||
| May-12 | Jun-12 | Jul-12 | May-12 | Jun-12 | Jul-12 | Jan-10 to Jul-11 |
Jan-11 to Jul-12 |
|
| Transportation | 37.3 | 37.6 | 38.1 | 35.0 | 36.6 | 37.7 | 19.4 | 19.8 |
| Month-over-Month % Change |
6.5% | 0.9% | 1.3% | 4.2% | 4.6% | 2.8% | ||
| Year-over-year % Change (NSA) |
8.3% | 7.7% | 13.4% | -9.5% | 2.3% | |||
| Communication | 16.9 | 17.4 | 17.3 | 16.9 | 17.1 | 17.2 | 9.7 | 9.5 |
| 0.0% | 3.1% | -0.6% | 0.2% | 0.9% | 0.8% | |||
| 0.3% | -6.1% | 0.4% | -0.1% | -2.1% | ||||
| Power | 92.1 | 88.2 | 87.1 | 93.5 | 91.4 | 89.1 | 38.8 | 52.1 |
| -2.1% | -4.3% | -1.2% | -1.1% | -2.2% | -2.6% | |||
| 32.5% | 17.2% | 19.0% | -3.4% | 34.2% | ||||
| Highway | 80.4 | 81.5 | 81.3 | 79.2 | 80.5 | 81.1 | 39.3 | 41.2 |
| 1.0% | 1.4% | -0.2% | 1.2% | 1.6% | 0.7% | |||
| 9.7% | 4.9% | 7.5% | -5.4% | 4.6% | ||||
| Water and Sewer | 35.7 | 34.9 | 34.4 | 36.0 | 35.5 | 35.0 | 20.5 | 20.1 |
| -0.5% | -2.3% | -1.2% | -1.5% | -1.4% | -1.3% | |||
| 1.0% | -5.4% | -6.2% | -10.5% | -2.2% | ||||
| Conservation & Development | 6.4 | 6.2 | 6.0 | 6.3 | 6.2 | 6.2 | 4.2 | 3.4 |
| 5.6% | -3.5% | -3.1% | 2.0% | -0.6% | -0.4% | |||
| -14.2% | -21.1% | -14.6% | 9.2% | -19.3% | ||||
| Total (2) | 268.8 | 265.8 | 264.3 | 266.9 | 267.4 | 266.3 | 132.0 | 146.1 |
| 0.5% | -1.1% | -0.6% | 0.3% | 0.2% | -0.4% | |||
| 13.3% | 5.7% | 8.5% | -5.5% | 10.7% | ||||
(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures). | ||||||||
Heavy engineering construction spending continues to face the headwind of falling government funding for infrastructure projects. Meanwhile, the slow, but steady improvement in the national economy and ultra-low long-term interest rates create significant incentives for private industry spending on heavy engineering construction projects, offsetting the cuts in government spending. Recent enactment of transportation funding through September 2014 should show up in increased spending over the next few months.
This month we extend the forecast horizon out to 2014. The forecast is for heavy engineering construction spending to increase 7.5% in 2012, 5.3% in 2013, and 6.6% in 2014.
U.S. Heavy Engineering (Non-Building) Construction | ||||||
| Actual | Forecast | |||||
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
| Transportation | 36.7 | 38.3 | 34.9 | 36.9 | 41.6 | 45.4 |
| Year-over-year % Change | 3.5% | 4.5% | -9.1% | 5.9% | 12.7% | 9.2% |
| Communication | 19.8 | 17.7 | 17.5 | 17.4 | 19.3 | 20.7 |
| -25.4% | -10.2% | -1.1% | -0.5% | 10.8% | 7.0% | |
| Power | 88.9 | 77.9 | 74.0 | 91.5 | 92.1 | 97.7 |
| 9.6% | -12.3% | -5.1% | 23.8% | 0.6% | 6.1% | |
| Highway | 82.2 | 82.5 | 78.9 | 80.6 | 87.7 | 93.7 |
| 1.0% | 0.4% | -4.4% | 2.2% | 8.7% | 6.8% | |
| Water and Sewer | 40.3 | 41.3 | 36.8 | 35.5 | 35.4 | 37.1 |
| -5.1% | 2.5% | -11.0% | -3.5% | -0.2% | 4.7% | |
| Conservation & Development | 5.8 | 7.2 | 7.4 | 6.2 | 6.2 | 6.4 |
| 9.9% | 24.7% | 2.8% | -16.5% | 0.5% | 3.6% | |
| Total (1) | 273.5 | 265.0 | 249.4 | 268.2 | 282.3 | 301.0 |
| 0.5% | -3.1% | -5.9% | 7.5% | 5.3% | 6.6% | |
(1) Total may not equal the sum of its components due to rounding. | ||||||
Read more forecasts from Reed Construction Data:
Construction Spending Stumbles in July
Nonresidential Building Construction Falls in July
New Residential Construction Spending Rises Again in July
