Monthly construction spending gains continued to slow in nonresidential markets through November with about a three quarter period of decline soon ahead. The November gain was entirely in the volatile highway, power and manufacturing markets with declines in building markets. Each of the three expanding facility markets is set for significant decline in 2009 but it is slow to take hold because these markets escaped a direct hit from the commercial mortgage credit problems that began last fall.

Obama’s revised economic stimulus plan now appears to include $100 billion plus for infrastructure spending which is much more than assumed in the current construction spending forecast. The stimulus plan has also been revised to dump the direct subsidies to homeowners, people who pay no income taxes and state and local government general funds. Instead, the focus is on the infrastructure market with direct grants and business tax incentives. The new plan is likely to be enacted more quickly. If so, the nonresidential construction spending forecast will be marked up.

U.S. Non-building (Heavy Engineering) Construction
(billions of U.S. current dollars)

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
The total includes some miscellaneous buildings.
Actuals: U.S. Census Bureau, Department of Commerce (put-in-place investment figures).
Forecasts and table: Reed Research Group.

U.S. Nonresidential Construction
(billions of U.S. current dollars)

* Monthly figures are seasonally adjusted at annual rates (SAAR figures).
Actuals: U.S. Census Bureau (Department of Commerce) (put-in-place investment figures).
Forecasts and table: Reed Construction Data.