US construction slipped in January
By Chris Sleight06 March 2012
US construction output for the 12 months to January was -0.1% lower than the figure seen in the previous month. However, at US$ 827 billion for the rolling 12 month period, the value of construction put in place was +7.1% higher than a year ago.
The small month-on-month decline was driven by a -0.2% drop in publicly funded construction, with a drop in the money invested in educational structures contributing most to the decline. This compared to flat spending overall in the private construction sector. However, the private sector was split by a +1.6% gain in residential construction, while the non-residential market was down -0.8%.
Compared to a year ago, it is the private sector which has contributed to growth in the US, with a +11.7% increase in activity more than offsetting a -0.5% decline in public construction. Private residential construction was up +5.4% compared to a year ago, while construction related to the manufacturing and power industries have shown the biggest gain in the non-residential sector.
In the public sector, there have been gains over the last 12 months in power, highway & street and public safety construction. However, these increases have been more than wiped-out by falls in the transportation, water supply and conservation categories, among others.
Commenting on the figures, Association of General Contractors (AGC) chief economist, Ken Simonson said, "The strong gains in single-family home building in December and January probably have a lot more to do with the unusually mild weather compared to year-ago conditions, than surging demand for new homes. Meanwhile, private non-residential activity dropped after an exceptionally large jump in December, but the January total was still up an impressive +17% from a year ago."
Economic forecasting company IHS was also downbeat. "The construction numbers for 2011 were dismal - total spending was at its lowest level since 1999. But the numbers improved as the year went on. The improvements will extend on this year. Still, we are not expecting 2012 to be a much better year than 2011 for the construction industry."