Heavy engineering (non-building) construction spending fell 0.5% on a seasonally adjusted (SA) basis in April, after inching up 0.1% in March. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending increased 5.7% from 2011. Only two of the major heavy engineering spending categories were up for the month—transportation (+2.1%) and highway (+0.4%) construction spending. Also, on a year-to-date basis just two construction spending categories were up compared to a year ago—power (+20.3%) and highway (+0.6%).
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. The nation is now approaching the expiration of the last extension of transportation funding passed in March at the end of June. It is unlikely that any long-term funding will be forthcoming before the November elections, meaning another temporary extension in the next week or two.
Taking all these factors into consideration, the forecast is for heavy engineering projects construction spending to increase 2.0% in 2012 and 2.2% in 2013.
U.S. Heavy Engineering (Non-Building) Construction |
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| Monthly Figures* (latest actual values) |
3-Month Moving Average |
Actual | Forecast | |||||||||
| Feb-12 | Mar-12 | Apr-12 | Feb-12 | Mar-12 | Apr-12 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Transportation | 35.0 | 35.5 | 36.2 | 35.1 | 35.3 | 35.6 | 35.5 | 36.7 | 38.2 | 35.5 | 36.5 | 39.2 |
| Month-over-Month % Change |
-1.0% | 1.4% | 2.1% | 0.6% | 0.6% | 0.8% | ||||||
| Year-over-year % Change (NSA) |
-2.4% | -4.7% | 0.3% | 11.3% | 3.5% | 4.2% | -7.0% | 2.6% | 7.4% | |||
| Communication | 17.3 | 17.5 | 17.3 | 17.6 | 17.5 | 17.4 | 26.5 | 19.8 | 18.3 | 17.8 | 17.9 | 19.8 |
| -1.5% | 0.9% | -1.1% | 0.9% | -1.0% | -0.6% | |||||||
| -0.3% | -6.1% | -4.9% | -4.0% | -25.4% | -7.6% | -2.4% | 0.2% | 10.6% | ||||
| Power | 97.7 | 97.7 | 96.4 | 99.5 | 98.0 | 97.2 | 81.1 | 88.9 | 78.5 | 89.9 | 97.6 | 96.6 |
| -1.0% | 0.0% | -1.3% | -0.4% | -1.5% | -0.8% | |||||||
| 22.6% | 19.5% | 16.6% | 22.7% | 9.6% | -11.6% | 14.4% | 8.6% | -1.0% | ||||
| Highway | 76.2 | 77.2 | 77.5 | 78.6 | 76.9 | 77.0 | 81.4 | 82.2 | 82.7 | 78.8 | 77.1 | 78.8 |
| -1.2% | 1.2% | 0.4% | -2.7% | -2.2% | 0.1% | |||||||
| 0.9% | -1.8% | 4.0% | 6.1% | 1.0% | 0.6% | -4.7% | -2.1% | 2.2% | ||||
| Water and Sewer | 38.2 | 36.8 | 36.2 | 38.2 | 37.8 | 37.1 | 42.4 | 40.3 | 41.4 | 37.2 | 36.7 | 37.3 |
| -0.9% | -3.7% | -1.6% | 0.5% | -0.9% | -2.0% | |||||||
| 1.6% | -2.8% | -1.4% | 4.4% | -5.1% | 2.6% | -10.0% | -1.5% | 1.6% | ||||
| Conservation & Development | 5.8 | 5.8 | 5.5 | 5.9 | 5.9 | 5.7 | 5.2 | 5.8 | 6.9 | 6.9 | 5.7 | 5.7 |
| -2.7% | 0.5% | -4.9% | -2.8% | -0.8% | -2.3% | |||||||
| -22.8% | -22.4% | -22.9% | -0.5% | 9.9% | 20.6% | -0.1% | -18.3% | 0.2% | ||||
| Total** | 270.2 | 270.4 | 269.1 | 274.9 | 271.3 | 269.9 | 272.1 | 273.5 | 266.0 | 266.2 | 271.4 | 277.3 |
| -2.9% | -1.4% | -0.3% | 0.1% | -0.9% | -1.5% | |||||||
| 7.3% | 4.1% | 5.1% | 9.7% | 0.5% | -2.8% | 0.1% | 2.0% | 2.2% | ||||
* Monthly figures are seasonally adjusted at annual rates (SAAR figures). |
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Read more forecasts from Reed Construction Data:
Construction Spending up in April Thanks to Residential Construction
Nonresidential Building Construction Down in April
New Residential Construction Spending Continues to Improve
