Nonresidential construction is expected to remain positive all year.
construction spending rose a tad in March following a big upward revision for
February, as single-family homebuilding finally held steady and nonresidential
construction boomed again," said
Ken Simonson, chief
economist for The Associated General Contractors of America (AGC). Simonson was
commenting on the April 30, 2007, construction spending report from the Census
construction spending rose 0.2 percent in March, seasonally adjusted, while the
gain for February was revised from 0.3 percent to a huge 1.5 percent,” Simonson
remarked. “New private single-family construction edged up 0.1 percent for the
month, though it was down 27 percent from a year ago. The next largest
category, the hard-to-measure residential improvements, more than reversed a
big February gain but were still 19 percent ahead of the March 2006 total. New
multifamily construction showed modest gains for both periods - up 0.2 percent
for the month and 1.5 percent year-over-year.
nonresidential surged another 2.4 percent for the month and 17 percent
year-over-year,” Simonson continued. “All 11 of the Census Bureaus’ categories
were up for the month and all but religious structures were up from March 2006.
or subcategories that did even better compared to March 2006 included lodging,
up 59 percent; offices, 31 percent; the multi-retail portion of commercial
(general merchandise stores, shopping centers and malls), 23 percent; electric
power, 22 percent; communication, 20 percent; and hospitals, 18 percent.
construction was up 0.4 percent from February and 9 percent from March 2006,” Simonson
observed. “The two big public categories - highways and streets, and education
- were 11 percent and 9 percent higher than a year before, respectively. The
next largest public category, transportation facilities, was up 8 percent
despite a big drop this March.
2007 as a whole, I expect the biggest private gainers to be power and
energy-related projects, some of which Census includes in manufacturing;
lodging; and hospitals,” Simonson concluded. “The office market may cool if
sluggish overall economic growth causes big firms to slow hiring of office
employees and the small-office market loses real estate agents, mortgage
brokers and title companies, as I anticipate. That market, along with some
retail construction, will be dragged down by a continuing steep decline in new
single-family construction. Public construction should remain modestly positive
but will be pressured by rising costs for construction materials and
For more information, visit the AGC Web site atwww.agc.org.
Construction Marches Ahead Following February Upturn
April 30, 2007