Construction Spending Falls to Lowest Level
in Seven Years, Driven by Nonresidential and Public Construction
March 2, 2010
Construction spending in January fell by $5.5 billion to $884 billion,
its lowest level since June 2003, according to an analysis of new
federal figures by the Associated General Contractors of America.
Declining investments in private-sector non-residential construction
and public construction at all levels of government drove the 0.6
percent decline, the association's chief economist Ken Simonson
"What's clear from this data is that the downturn in nonresidential
construction spending is far from over," Simonson says. "Federal
funding for construction is one of the few crutches propping up
a deeply wounded construction industry."
Simonson says that private, nonresidential construction spending
declined by 2.1 percent between December and January, and by 20
percent over the past year. Power construction was the only private
nonresidential construction category to increase over the past year,
by 16 percent, while most other categories declined by double digits,
According to Simonson, the two major categories of federally-driven
transportation spending, public highway and street construction
and other transportation construction, increased by 6 and 18 percent,
respectively. In addition, direct federal construction spending
increased 1.9 percent in January and 13 percent over the past 12
months to a record $31 billion.
"Federal funding has been giving contractors the lifeline they
need to stay in business," says Simonson. Many construction
jobs are now at risk, however, because the federal transportation
program expired February 28.
Association officials have urged Congress to act quickly to renew
the federal transportation program. "Thousands of construction
workers are counting on Congress to fix this problem before they
and the entire economy are made to suffer," says Stephen E.
Sandherr, the association's chief executive officer.
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