US construction spending falls in July
02 September 2010
The value of construction put in place in the US in the 12 months to the end of July fell to US$ 805 billion. This was a -1% decline on the figure for the rolling 12 months to the end of June, and a -10.7% fall on the figure for July 2009.
Privately funded work saw the steepest decline, with a fall of -12.2% from July 2009 to US$ 506 billion. Although there was some year-on-year growth in private residential construction, most non-residential sectors saw declines in activity, particularly the lodging, office and manufacturing sub-sectors.
There was also a year-on-year fall in public construction, although with a -7.9% decline to US$ 299 million, the drop was less pronounced. There was some growth in sewage, waste disposal and conservation-related construction, but most other sectors saw a decline, particularly the health care and education sub-sectors.
This highlights the problems in the non-residential sector. Across both publicly and privately funded schemes, output was down -16.6% compared to a year ago - a drop in Dollar terms of some US$ 110 billion.
The figures from the US Census Bureau were greeted with disappointment from the industry. Ken Simonson, chief economist for Associated General Contractors of America (AGC) said, "While the stimulus is funding some vital infrastructure projects, the private sector is too cautious and state and local governments are too cash-strapped, to help. As a result, overall construction spending is at its lowest level in a decade and hundreds of thousands of construction workers are unemployed."
Patrick Newport, US Economist at economic forecasting company IHS Global Insight added, "The nonresidential construction downturn shows few signs of letting up... Although we expect spending on nonresidential construction to level off in about a year, a solid rebound is several years away."