Non Public Construction Grows

The value of new construction starts climbed 12 percent in October, at a seasonally adjusted annual rate (SAAR), McGraw-Hill Construction (MHC) construction.com reported,, based on data it compiled. “The upward push came from double-digit gains for non-residential building and non-building construction (public works and electric utilities). At the same time, residential building in October was unchanged from its September pace.”

Real investment in private nonresidential structures dropped 15 percent after falling 17 percent in the second quarter and 43 percent in the first quarter. Real residential investment jumped 19.5 percent, breaking a string of 14 quarterly declines. Real government gross investment in structures rose 10 percent, following a 24 percent leap in the second quarter. The price index for private nonresidential structures dropped 10 percent (SAAR) in both quarters; the price index for residential investment, -2.6 percent in the third quarter and -5.2 percent in the second; the price index for government structures, -5.2 percent and -4.3 percent, respectively.

The Bureau of Labor Statistics (BLS) www.bls.gov reported that, compared to October 2008, employment declined in every state but rose in Washington, D.C. Construction employment rose for the month in 17 states plus D.C., fell in 31 and was unchanged in Alaska and New Hampshire. Compared to October 2008, construction employment fell everywhere except in North Dakota, which had a rise of 400 jobs. The largest 12-month percentage declines were in Nevada, 27 percent; Arizona, 24 percent; Tennessee, 22 percent; Kentucky, 21 percent; and Connecticut, 19 percent.

“Preliminary tax collection data for the July-September quarter of 2009 show continued widespread and sharp declines for most states for all three major sources of tax revenue, as well as for overall taxes,” the Rockefeller Institute www.rockinst.org reported on Monday. These shortfalls are likely to mean cuts to state-funded construction; several state departments of transportation (DOTs) have already made additional cuts.

The Federal Highway Administration on November 2 distributed internally a spreadsheet that showed state DOTs have obligated (committed to specific projects) 77percent of the $20 billion in stimulus money for highway construction they received. (An additional $7 billion of highway funding was sent to local agencies.) About 14 percent had been expended (payments made to contractors for work completed and billed). Wyoming had obligated 100 percent of its funds, followed by Utah, 97 percent; Maine, 95 percent; and Nevada, 93 percent. Maine led in percent expended, 56 percent; followed by Iowa, 46 percent; Utah, 44 percent, Vermont, 42 percent; and Wyoming, 41 percent.

Edited by Kevin Doyle

The Data DIGest is a weekly summary of economic news compiled by Ken Simonson, the Chief Economist of The Associated General Contractors of America (AGC).

How has the recession affected you? Are you seeing an upturn? Contact Construction Digital Editor Kevin Doyle Email Me to tell us more.