Heavy construction spending down 0.8% in June

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heavy construction spending down 0.8% in june

August 21, 2009 - Jim Haughey

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The small June decline in heavy construction spending is likely the beginning of a 7-9 month cutback period in this market with the decline in spending reaching 3-4%, about 5-7% after adjusting for rising project costs. Private facility investment has recently begun to decline under stress from reduced capacity needs during the recession. This decline will accelerate over the next year, especially for power projects where starts have dropped by nearly half.

The impact of the recession on heavy project construction spending will be dampened by the federal pump-priming supplements to public works budgets less a negative offset from the collapse of the federal Highway Trust Fund financing system.

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

	Monthly Figures* (latest actual values)		Annual Figures
	Monthly Figures* (latest actual values)		Actual		Forecast
	May-09	Jun-09	2007	2008	2009	2010	2011
Transportation (% change is period versus same period, previous year)	33.785	34.497	31.697	33.975	33.087	35.000	38.950
	1.8%	2.3%	13.6%	7.2%	-2.6%	5.8%	11.3%
Communication	21.189	20.124	40.655	41.995	42.308	42.675	45.775
	-28.9%	-22.5%	6.6%	3.3%	0.7%	0.9%	7.3%
Power	93.076	90.680	59.089	79.856	85.828	80.250	77.000
	14.3%	13.3%	48.3%	35.1%	7.5%	-6.5%	-4.0%
Highway	81.438	81.640	76.727	81.192	81.829	88.150	96.100
	2.8%	2.7%	6.9%	5.8%	0.8%	7.7%	9.0%
Water and Sewer	42.334	43.026	40.655	41.995	42.308	42.675	45.775
	1.0%	1.6%	6.6%	3.3%	0.7%	0.9%	7.3%
Conservation & Development	5.662	5.352	5.252	5.414	5.704	6.05	6.425
	11.1%	0.4%	3.0%	3.1%	5.3%	6.1%	6.2%
Total	277.484	275.319	240.910	268.248	268.751	271.488	285.0125
	2.5%	3.1%	17.5%	11.3%	0.2%	1.0%	5.0%

* 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.

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