Heavy Engineering Construction Spending Held Steady in November

01/23/2013 by Bernard M. Markstein

Heavy engineering (non-building) construction spending was unchanged in November after increasing 0.3% on a seasonally adjusted (SA) basis in October. On a year-to-date, not seasonally adjusted (NSA) basis, heavy engineering spending was 8.2% higher than the same period in 2011.

There were solid increases in construction spending for transportation (+1.3%) and for communication (3.3%) in November.
But these were more than offset by declines in construction spending for power (-0.7%) and for conservation and development
(-13.5%). On a year-to-date basis, three categories posted higher construction spending compared to 2011 — transportation (+7.9%), power (+26.9%), and highway (+1.4%).

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)
  Sep-12 Oct-12 Nov-12 Sep-12 Oct-12 Nov-12 Jan-11 to
Nov-11
Jan-12 to
Nov-12
Transportation 39.1 41.3 41.8 38.4 39.6 40.7 32.0 34.5
  Month-over-Month
  % Change
1.9% 5.6% 1.3% 1.3% 2.9% 2.9%    
  Year-over-year
  % Change (NSA)
13.2% 23.7% 24.3%       -9.4% 7.9%
Communication 17.8 16.6 17.2 17.3 17.1 17.2 15.8 15.5
  6.7% -6.9% 3.3% 0.8% -1.4% 0.9%    
  -8.0% 3.8% 4.2%       -1.0% -1.8%
Power 90.6 90.9 90.3 90.6 90.3 90.6 66.4 84.2
  1.3% 0.4% -0.7% 0.6% -0.4% 0.3%    
  20.5% 13.7% 11.1%       -4.7% 26.9%
Highway 78.3 77.7 78.0 79.7 78.6 78.0 73.8 74.8
  -1.9% -0.8% 0.4% -1.6% -1.3% -0.8%    
  -6.5% -0.5% -5.9%       -4.7% 1.4%
Water and Sewer 35.1 35.4 35.5 34.3 34.9 35.3 33.9 32.7
  2.3% 0.8% 0.3% 0.9% 1.8% 1.1%    
  -3.5% -4.4% -3.8%       -11.4% -3.6%
Conservation & Development 6.5 6.4 5.5 6.2 6.4 6.1 6.8 5.6
  4.0% -3.0% -13.5% 2.6% 2.7% -4.2%    
  -9.5% -11.1% -17.0%       3.9% -17.7%
Total (2) 267.5 268.3 268.3 266.6 266.9 268.0 228.7 247.3
  1.0% 0.3% 0.0% 0.1% 0.1% 0.4%    
  3.2% 6.3% 4.2%       -6.0% 8.2%

(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 will struggle to obtain government funding for new projects. Public-private partnerships are offsetting some of the lost public funding. Meanwhile, private firms invest in heavy construction projects without direct government funding (power and communication are two major areas). Heavy engineering construction spending is estimated to increase 7.3% in 2012 and is forecasted to increase 3.6% in 2013 and to increase 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 43.7 47.7
   Year-over-year % Change 3.5% 4.5% -9.1% 7.4% 16.8% 9.2%
Communication 19.8 17.7 17.5 17.1 18.0 19.2
-25.4% -10.2% -1.1% -2.4% 5.0% 6.9%
Power 88.9 77.9 74.0 92.4 93.1 100.6
  9.6% -12.3% -5.1% 25.0% 0.7% 8.0%
Highway 82.2 82.5 78.9 78.9 80.0 83.8
1.0% 0.4% -4.4% 0.0% 1.4% 4.7%
Water and Sewer 40.3 41.3 36.8 35.5 36.4 38.1
  -5.1% 2.5% -11.0% -3.3% 2.4% 4.8%
Conservation & Development 5.8 7.2 7.4 6.1 6.0 6.3
9.9% 24.7% 2.8% -17.2% -1.7% 4.8%
Total (1) 273.5 265.0 249.4 267.5 277.2 295.7
0.5% -3.1% -5.9% 7.3% 3.6% 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.

Read more forecasts from Reed Construction Data:

Construction Spending Slips in November
Nonresidential Building Construction Spending Takes a Step Back in November
New Residential Construction Spending Rises at a Slower Pace in November