by Shane Henson — January 11, 2013—Construction spending dipped from October to November 2012, but resolution of the uncertainty regarding federal taxes for 2013 should unleash more private construction investment, according to an analysis of new federal data released by the Associated General Contractors of America, a Washington, DC-based association for the construction industry. Association officials warned, however, that unresolved issues about federal construction spending, including storm relief for northeastern states, will hold down public construction spending.
“Preliminary data from the Census Bureau for November shows overall construction spending slipped 0.3 percent from October’s total after seven months of steady gains,” said Ken Simonson, the association’s chief economist. “The more significant comparison, however, is with year-ago levels, and the November report shows a respectable 7.7 percent gain over the past 12 months.”
Simonson noted that private single and multifamily spending continued growing strongly. Spending on new single-family houses climbed 1.3 percent for the month and 29 percent year-over-year, while multifamily spending rose 0.5 percent and 46 percent, respectively.
Simonson also pointed out four categories of private nonresidential construction that posted increases of more than 10 percent between November 2011 and November 2012, although results for the latest month were mixed. Lodging construction declined 1.3 percent for the month but jumped 26 percent over 12 months. Office construction shrank 0.9 percent from October but grew 17 percent from November 2012. Private transportation construction, principally by rail and trucking companies, added 3.4 percent for the month and 16 percent year-over-year. Power and energy construction, including spending on oil and gas fields and pipelines, contracted 1.4 percent from October but rose 14 percent over 12 months.
Simonson observed that public construction spending, which has alternated between monthly increases and decreases in 2012, sank 0.4 percent in November and 2.6 percent year-over-year. He said the two biggest categories of public spending both rose for the month but declined from November 2011 levels. Highway and street construction spending was up 0.5 percent from October but down 6.0 percent from a year ago, while educational construction spending rose 0.1 percent for the month but fell 3.4 percent from year-ago levels.
