Residential sector pulls down total

18 March 2008

Construction spending in the US for the 12 months to August was -1.7% lower than a year previously according to figures from the US Census Bureau. The drop was due to a steep decline in residential activity, which accounts for about 45% of the total US$ 1.17 billion spent on construction in the US for the last year.

Despite a strong non-residential sector, the private construction market was down -6.1% compared to August 2006, due to a -16% fall in residential construction spending. Last August the residential market was worth US$ 631 million, but the Figure for the 12 months to August this year was US$ 529 million.

According to the Associated General Contractors of America (AGC), this was the 18th consecutive month that private residential construction had declined.

In the private non-residential sector, most sectors have grown since last August, with particularly steep rises in the hotel and power construction markets, and in construction related to public safety. But despite an overall +14.7% rise in the non-residential market, private construction spending in the US was down -6.1% compared to a year ago.

Public-funded construction was also up +14.7% compared to last August, with strong growth in the public safety, office and health care sectors.

But with a value of US$ 291 million – 25% of the total market-this rise and the improvement in the US$ 346 private non-residential market were not enough to offset the decline in house building.

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