Construction spending tumbled in February by $11.6 billion, or 1.3 percent, to $846 billion, a low last recorded in 2002, according to an analysis of new federal figures by the Associated General Contractors of America. Declines occurred relative to both the month before and February 2009 in most categories of private residential and nonresidential construction, as well as public construction, the association’s chief economistKen Simonsonnoted.
of the economy seems to be improving but construction is falling into an even
deeper hole,” he commented. “Bad weather may account for a small part of
February’s downturn, but most of the contraction reflects ongoing lack of
demand, tight credit conditions and shrinking state and local budgets.”
pointed out that the February decrease might prove to be even worse once the
government has more complete data. Today’s report included downward revisions
of $27 billion (3 percent) in the January total and $20 billion (2 percent) in
the December figure. The December number had already been cut by $13 billion (1
percent) in last month’s release, he said. “It appears many projects are being
halted or scaled back.”
remarked that new single-family construction spending remained essentially flat
in February, dipping by 0.1 percent after eight consecutive monthly increases,
and was 3.9 percent above the February 2009 total. Improvements to existing
single- and multi-family construction were down 4.3 percent for the month but
4.3 percent higher than a year earlier.
numbers suggest that single-family construction will rebound in 2010, even as
multi-family continues to sink,” he said. New multi-family construction spending
was level in February but 52 percent below the year-ago number.
private nonresidential categories, the only bright light is power construction -
power plants, renewables such as wind and solar, and transmission lines - where
spending rose 1.3 percent in February and 9 percent compared to a year before,”
Simonson stated. “I expect this good news to continue, but I also anticipate
further double-digit annual declines in other categories.”
cited spending declines on lodging (-6.7 percent for the month, -53 percent
year-over-year); commercial, including retail, warehouse and farm (-3.5 percent
and -38 percent); private offices (-2.0 percent and -38 percent); and
manufacturing (+3.4 percent and -35 percent).
care spending could go either way; it will take a while for providers and
investors to digest the implications of the new law,” Simonson concluded,
noting that total health care spending shrank 1.6 percent in February and 15
percent from a year before.
Source: Associated General Contractors of America