Uneven Pattern in Construction Spending ‘Likely to Last’June 10th, 2014 by Editor
For the third straight month, total construction rose at a modest rate in April, though Associated General Contractors (AGC) of America officials caution its recovery remains “fragile and fragmented” with an uneven pattern “likely to last.”
“Residential, private nonresidential and public construction spending all have areas of strength but also pockets of weakness,” says Ken Simonson, AGC’s chief economist. “While the overall trend remains more positive than last year, growth is likely to be spotty for the foreseeable future.”
According to new Census Bureau data, construction put in place in April totaled $954 billion, 0.2 percent above the revised February total and 8.6 percent higher than in April of last year. The year-over-year growth so far in 2014 has exceeded the full-year increase of 5.0 percent recorded from 2012 to 2013.
Private residential construction spending inched up 0.1 percent in April to a six-year high. The latest total exceeded the year-ago level by 17 percent. Single-family construction rose 1.3 percent in April and 14 percent year-over-year. Multifamily spending soared 4.4 percent and 31 percent, respectively. Improvements to existing single- and multifamily structures slumped 2.2 percent for the month but increased 17 percent from a year ago.
Private nonresidential spending dipped 0.1 percent in April but climbed 5.6 percent over 12 months. Most major categories increased from year-ago levels. However, the largest private segment, power construction—comprising work on oil and gas fields and pipelines as well as electricity projects—slipped 0.6 percent for the month and 3.9 percent over the year. The fastest-growing private type was office construction, which jumped 3.1 percent in April and 26 percent since April 2013.
Public construction spending rose 0.8 percent for the month and 1.2 percent year-over-year. The largest public segment, highway and street construction, declined 1.1 percent in April but increased 4.9 percent from a year before. The second-biggest category, educational construction, gained 3.0 percent and 4.9 percent, respectively.