WASHINGTON, DC—Construction spending overall reached a new high in October, the Associated General Contractors of America said Friday. However, AGC notes a significant qualifier in that statement: a lag in public-sector spending on infrastructure.
With spending at a seasonally adjusted annual pace of $1.241 trillion for the month, “There was healthy growth this October in both public and private construction spending, with an exceptionally strong surge in public educational construction,” says Ken Simonson, chief economist with AGC. “But for the first 10 months of 2017 combined, public investment—specifically in infrastructure—has fallen short of the already inadequate amounts posted in the same period of 2016.”
On a month-to-month basis, construction spending overall was up 1.4% from the September total. Within that spectrum, public construction was up 3.9%, led by a 10.9% increase in educational construction. Private nonresidential spending rose 0.9% for the month, while private residential spending increased 0.4% from September.
However, on a year-to-date basis public construction was down 3.4% from the year-ago period, with the declines centered on infrastructure categories, says Simonson. Public spending YTD on highway and street construction declined 4.3% from the same period in 2016. Transportation spending was off 1.6% from the year-ago period; investment in sewage and waste disposal dropped 15.9%; and water supply construction declined by 9.6%.
Private residential spending, in contrast, was up 11.2% YTD from January through October of '16. That equated to a 9% increase in single-family construction, 3.9% a 3.9% rise in new multifamily builds and an increase of 17.2% on improvements to existing properties.
Warehouse projects powered the 14.7% year-over-year increase in YTD commercial builds; the category also encompasses retail and farm construction. The largest private nonresidential category, power—including electric power plus oil and gas field and pipeline construction—was off 2.5% for the January-October period compared to this time last year.
AGC is urging government entities at the federal, state and local levels to increase funding for infrastructure. “It is essential to increase the nation's investment in roads and other transportation facilities to keep the economy growing,” says AGC CEO Stephen Sandherr, adding that “investment in safer highways, drinking water and wastewater systems are important for public safety and health.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
