US non-residential still strong

02 May 2008

The US non-residential construction market grew +12% in the 12 months to the end of March. However, difficult conditions in the residential sector meant construction spending as a whole declined over the year.

Commenting on the latest statistics from the US Census Bureau, Associated General Contractors of America (AGC) chief economist Ken Simonson said, “The housing slump buried the good news by dragging total spending down.”

According to Mr Simonson, outside the housing sector, private investment in construction continues to be strong. “Both private and public non-residential construction are still growing, although public spending is losing speed. Private non-residential spending was up +15% from March 2007, whereas public spending grew +7.2,” he said.

Mr Simonson continued, “I expect a further slowdown in public spending as revenues flatten out or even shrink for highways, schools and other public projects. On the private side, I expect ongoing vigour in spending on power, energy, communications, hospital, higher education and military base realignment-related projects to offset a likely retreat by office and retail construction.

“The biggest challenge for all non-residential construction is runaway materials costs,” he concluded.
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