Heavy engineering (non-building) construction spending rose 2.0% in December after advancing 1.8% in November, marking its fifth consecutive monthly increase. For 2011, heavy engineering spending was almost unchanged, down a slight 0.1% from 2010. All major heavy engineering spending categories except conservation and development moved up in December. Spending on power construction advanced for the fifth month in a row, posting a solid 2.7% increase after rising an even stronger 3.7% in November. Power spending has risen in nine of the last ten months and was up 14.0% for 2011, the only heavy engineering category to increase for the year.
With the economy projected to continue improving, the heavy engineering construction sector is expected to remain on an expansion path. Although there is pressure at the federal level to reduce the deficit, the nation’s infrastructure needs are as great as ever. Recent passage of the FAA reauthorization bill indicates that Congress is capable of enacting much needed legislation for long-term infrastructure funding. However, the huge gap between the House’s $260 billion transportation bill and the Senate’s $109 billion version does not bode well for real progress on funding for surface transportation.
Taking all these factors into consideration, the forecast is for heavy engineering projects construction spending to increase 9.2% in 2012 and 3.3% in 2013.
U.S. Heavy Engineering (Non-Building) Construction |
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| Monthly Figures* (latest actual values) |
3-Month Moving Average |
Actual | Forecast | |||||||||
| Oct-11 | Nov-11 | Dec-11 | Oct-11 | Nov-11 | Dec-11 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Transportation | 34.488 | 34.022 | 34.302 | 35.149 | 34.561 | 34.271 | 35.471 | 36.701 | 38.232 | 35.438 | 35.114 | 37.140 |
| Month-over-Month % Change | -1.9% | -1.4% | 0.8% | 0.3% | -1.7% | -0.8% | ||||||
| Year-over-year % Change (NSA) | -9.5% | -7.6% | -9.6% | 11.3% | 3.5% | 4.2% | -7.3% | -0.9% | 5.8% | |||
| Communication | 17.467 | 16.883 | 18.002 | 17.794 | 17.503 | 17.451 | 26.487 | 19.753 | 18.261 | 17.817 | 18.396 | 20.531 |
| -3.8% | -3.3% | 6.6% | -1.7% | -1.6% | -0.3% | |||||||
| -4.4% | -10.0% | -3.5% | -4.0% | -25.4% | -7.6% | -2.4% | 3.2% | 11.6% | ||||
| Power | 94.869 | 98.378 | 101.045 | 92.311 | 95.120 | 98.097 | 81.075 | 88.861 | 78.540 | 89.528 | 107.274 | 108.032 |
| 3.0% | 3.7% | 2.7% | 2.4% | 3.0% | 3.1% | |||||||
| 13.5% | 7.5% | 9.8% | 22.7% | 9.6% | -11.6% | 14.0% | 19.8% | 0.7% | ||||
| Highway | 81.668 | 82.973 | 84.497 | 80.432 | 81.881 | 83.046 | 81.361 | 82.166 | 82.657 | 78.881 | 84.801 | 86.767 |
| 0.8% | 1.6% | 1.8% | 2.4% | 1.8% | 1.4% | |||||||
| -5.3% | -2.3% | 2.3% | 6.1% | 1.0% | 0.6% | -4.6% | 7.5% | 2.3% | ||||
| Water and Sewer | 36.863 | 37.235 | 37.347 | 37.020 | 37.022 | 37.148 | 42.448 | 40.301 | 41.368 | 37.178 | 38.399 | 40.903 |
| -0.3% | 1.0% | 0.3% | -0.1% | 0.0% | 0.3% | |||||||
| -13.3% | -8.8% | -6.8% | 4.4% | -5.1% | 2.6% | -10.1% | 3.3% | 6.5% | ||||
| Conservation & Development | 6.721 | 6.197 | 6.118 | 6.774 | 6.492 | 6.345 | 5.234 | 5.750 | 6.937 | 6.926 | 6.254 | 6.367 |
| 2.5% | -7.8% | -1.3% | 0.1% | -4.2% | -2.3% | |||||||
| -8.5% | -21.3% | -13.5% | -0.5% | 9.9% | 20.6% | -0.2% | -9.7% | 1.8% | ||||
| Total** | 272.076 | 275.688 | 281.311 | 269.480 | 272.579 | 276.358 | 272.076 | 273.532 | 265.995 | 265.768 | 290.238 | 299.740 |
| 0.8% | 1.3% | 2.0% | 1.4% | 1.1% | 1.4% | |||||||
| -1.4% | -1.6% | 1.3% | 9.7% | 0.5% | -2.8% | -0.1% | 9.2% | 3.3% | ||||
* Monthly figures are seasonally adjusted at annual rates (SAAR figures). |
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Read more forecasts from Reed Construction Data:
Construction Spending Ends the Year on an Up Note
Nonresidential Building Construction Advances in December
New Residential Construction Spending Rises in December
