Heavy engineering (non-building) construction spending inched up 0.2% on a seasonally adjusted (SA) basis in May, after rising 0.4% in April. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending increased 11.9% from 2011. Three of the major heavy engineering spending categories were up for the month — transportation (+0.6%), power (+0.7%), and conservation & development (+8.9%) construction spending. On a year-to-date basis just two construction spending categories were up compared to a year ago — power (+42.5%) and highway (+1.6%).
U.S. Heavy Engineering (Non-Building) Construction | ||||||||
| Monthly Figures (1) (latest actual values) |
3-Month Moving Average | Year-to-Date (NSA) | ||||||
| Mar-12 | Apr-12 | May-12 | Mar-12 | Apr-12 | May-12 | Jan-10 to May-11 |
Jan-11 to May-12 |
|
| Transportation | 32.8 | 34.4 | 34.6 | 33.5 | 33.4 | 33.9 | 13.3 | 12.8 |
| Month-over-Month % Change |
-0.8% | 4.8% | 0.6% | -2.7% | -0.2% | 1.5% | ||
| Year-over-year % Change (NSA) |
-8.0% | -2.9% | 0.0% | -8.3% | -3.6% | |||
| Communication | 17.0 | 16.9 | 16.9 | 17.1 | 16.9 | 16.9 | 6.7 | 6.6 |
| 1.1% | -0.7% | -0.2% | -1.7% | -1.0% | 0.1% | |||
| -7.7% | -5.2% | 0.1% | -0.5% | -1.8% | ||||
| Power | 94.2 | 93.3 | 93.9 | 96.7 | 94.2 | 93.8 | 26.2 | 37.4 |
| -1.1% | -1.0% | 0.7% | 3.5% | -2.6% | -0.5% | |||
| 38.4% | 38.4% | 34.9% | -3.9% | 42.5% | ||||
| Highway | 77.8 | 78.5 | 78.1 | 77.2 | 77.9 | 78.1 | 23.5 | 23.9 |
| 0.3% | 0.9% | -0.5% | -1.9% | 1.0% | 0.3% | |||
| -2.0% | 4.8% | 4.2% | -5.0% | 1.6% | ||||
| Water and Sewer | 36.4 | 36.1 | 35.6 | 37.2 | 36.6 | 36.0 | 14.0 | 14.0 |
| -2.5% | -0.7% | -1.5% | -0.7% | -1.6% | -1.6% | |||
| -3.0% | 0.5% | 0.5% | -9.0% | -0.3% | ||||
| Conservation & Development | 6.3 | 6.3 | 6.9 | 6.1 | 6.2 | 6.5 | 3.0 | 2.4 |
| 4.3% | -0.5% | 8.9% | -0.2% | 1.8% | 4.2% | |||
| -21.2% | -16.6% | -9.2% | 15.4% | -18.5% | ||||
| Total (2) | 264.5 | 265.4 | 265.9 | 267.7 | 265.3 | 265.3 | 86.7 | 97.0 |
| -0.6% | 0.4% | 0.2% | 0.1% | -0.9% | 0.0% | |||
| 8.3% | 11.3% | 11.1% | -5.0% | 11.9% | ||||
(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures). | ||||||||
Reduction in government funding for infrastructure projects continues to be the biggest threat to heavy engineering construction spending. Growth in the national economy will lead to spending by private industry on heavy engineering construction projects, offsetting (just barely) the cuts in government spending. Congress continues to struggle with transportation funding. One significant positive for heavy engineering is the recent enactment of a transportation funding bill providing $105 billion through September 2014. Although not the five-year funding many would have liked, it was much better than the short-term extensions that had been the norm for the past several years.
Taking all these factors into consideration, the forecast is for heavy engineering projects construction spending to increase 7.4% in 2012 and 2.5% in 2013. The 2012 forecasted increase is up from last month’s 2.0%. The sharp revision on a percentage basis is due to significant downward revision by the Census Bureau of heavy engineering construction spending (see www.reedconstructiondata.com/construction-forecast/news/2012/07/updating-history-revised-construction-spending-data-for-2010-12/ for details). Note that although the growth rate for the 2012 forecast is up from last month, the level of spending is down $3.7 billion, or 1.4% of the new forecast level.
U.S. Heavy Engineering (Non-Building) Construction | ||||||
| Actual | Forecast | |||||
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Transportation | 35.5 | 36.7 | 38.3 | 34.9 | 34.6 | 37.2 |
| Year-over-year % Change | 11.3% | 3.5% | 4.5% | -9.1% | -0.7% | 7.4% |
| Communication | 26.5 | 19.8 | 17.7 | 17.5 | 17.2 | 18.9 |
| -4.0% | -25.4% | -10.2% | -1.1% | -1.9% | 10.1% | |
| Power | 81.1 | 88.9 | 77.9 | 74.0 | 95.0 | 93.6 |
| 22.7% | 9.6% | -12.3% | -5.1% | 28.4% | -1.5% | |
| Highway | 81.4 | 82.2 | 82.5 | 78.9 | 78.7 | 82.4 |
| 6.1% | 1.0% | 0.4% | -4.4% | -0.2% | 4.6% | |
| Water and Sewer | 42.4 | 40.3 | 41.3 | 36.8 | 35.7 | 35.7 |
| 4.4% | -5.1% | 2.5% | -11.0% | -3.0% | 0.0% | |
| Conservation & Development | 5.2 | 5.8 | 7.2 | 7.4 | 6.5 | 6.8 |
| -0.5% | 9.9% | 24.7% | 2.8% | -11.4% | 3.5% | |
| Total (1) | 272.1 | 273.5 | 265.0 | 249.4 | 267.8 | 274.5 |
| 9.7% | 0.5% | -3.1% | -5.9% | 7.4% | 2.5% | |
(1) Total may not equal the sum of its components due to rounding. | ||||||
Read more forecasts from Reed Construction Data:
Construction Spending Rose for the Second Consecutive Month
Nonresidential Building Construction Slipped for the Second Month in a Row
New Residential Construction Spending Continues Its Improvement
