An unusual surge in public construction in October pushed total construction spending to its highest level since May 2009, despite a dip in both private residential and nonresidential activity, according to a recent analysis of new Census Bureau data by the Associated General Contractors of America.
“Nearly every category of public construction increased in October, according to the preliminary Census figures, although for the first 10 months of 2013 combined, public spending continues to lag the 2012 year-to-date total,” said Ken Simonson, the association's chief economist. “Meanwhile, residential spending slipped for the month but still showed strong year-to-date gains, and nonresidential spending remained stuck in neutral.”
Construction put in place in October totaled $908 billion, 0.8% higher than in September. But figures for August and July were revised down below levels that initially exceeded the current October estimate. The total for the first 10 months of 2013 was 5.0% above the year-to-date mark for the same months in 2012.
Public construction spending jumped 3.9% for the month but trailed the 2012 year-to-date total by 2.8%. The two largest public components were mixed: highway and street construction increased 0.6% in October and 0.3% year-to-date, while educational construction leaped 8.5% for the month but fell 8.5% year-to-date, Simonson said.
Private residential spending slid 0.6% for the month but still climbed 17% year-to-date. New single-family construction decreased 0.6% in October but soared 30% in the first 10 months of 2013 compared with 2012. New multifamily spending advanced 2.2% in October and 46% year-to-date.
Private nonresidential spending edged down 0.5% for the month and up 0.8% year-to-date, Simonson observed. The largest private nonresidential category, power—including oil and gas as well as electricity—plunged 5.7% and 5.8% over the two time periods. But the next three niches in size—manufacturing, commercial (retail, warehouse and farm) and offices—rose for the month and year-to-date.
“Construction will likely display varied patterns in the next several months,” Simonson said. “Multifamily construction will keep burgeoning but single-family homebuilding may stall. Private nonresidential spending should benefit from more power, energy and manufacturing work. Public construction remains threatened.”