Monthly Spending Decline Comes as Industry Leaders Begin Push for Action on Needed Federal Infrastructure Programs to Fund Highway, Transit and Clean Water Upgrades; Measures Will Add Stability to Market
January 2, 2015-- Construction spending edged down in November but outlays for the year remained on track for a modest increase over 2013 totals, according to an analysis by the Associated General Contractors of America. Association officials said the new spending figures come as the group's members prepare a new push for action on a series of federal infrastructure programs, including funding for highway and transit upgrades and to maintain clean water systems across the country.
"Today's figures continue the seesaw pattern that has characterized residential, private nonresidential and public construction throughout 2014," said Ken Simonson, the association's chief economist. "Overall construction spending dipped in November from an upwardly revised October total as residential building advanced but private and public nonresidential spending both retreated."
Construction spending in November totaled $975 billion at a seasonally adjusted annual rate, down 0.3 percent from the October total but 2.4 percent higher than in November 2013, Simonson noted. Private residential spending in November climbed 0.9 percent from October but slipped 0.5 percent from a year earlier, while private nonresidential spending dropped 0.3 percent for the month but rose 4.7 percent year-over-year. The third component of the total—public construction spending—tumbled 1.7 percent from October but was 3.2 percent higher than in November 2013.
"Month-to-month figures tend to fluctuate a lot; in addition, the first estimates are often revised substantially," Simonson added. "Totals that combine several months give a truer picture of underlying trends. In this case the image is more uniformly positive: total spending on all three components increased during the first 11 months of 2014 combined compared with the year-to-date period in 2013. Both the monthly variability and the overall upward trend are likely to continue through much of 2015."
Total spending year-to-date was 5.7 percent above the January-November 2013 total, Simonson said. Private residential spending rose 4.9 percent, while private nonresidential construction increased 10.8 percent. Public outlays for construction grew by 1.1 percent as state and local governments boosted spending by 1.6 percent, more than offsetting a 4.0 percent decline in federal construction expenditures.
Association officials said the new spending data comes as the group prepares a push to get Congress and the Obama administration to pass needed infrastructure measures. In particular, the group is pushing for action to finance the federal highway and transit program and to set up a more sustainable way to finance clean water system upgrades in communities across the country.
"The president and Congress can demonstrate their ability to work together by enacting measures that will boost our economic growth, improve our aging infrastructure and help stability the erratic construction sector," said Stephen E. Sandherr, the association's chief executive officer.
