Construction Spending Stumbles Again in May;
Stimulus Provides Only Bright Spot for Nonresidential, AGC Says
July 2, 2010
Construction spending shrank again in May, dropping 8 percent from
a year earlier, although homebuilding and stimulus-funded public
works increased from year-ago levels, according to an analysis of
new Census Bureau data by the Associated General Contractors of
"Stimulus has made a difference, but Congress needs to provide
long-term funding for transportation and water projects to assure
further economic growth," said Ken Simonson, chief economist
for the AGC. "Private nonresidential construction sagged 25
percent from May 2009 to May 2010, while public construction edged
down 3 percent, and private residential construction rose 11 percent.
Federal stimulus funds helped keep public construction afloat and
buoyed single-family construction."
According to Simonson new single-family home construction in May
soared 31 percent from the depressed levels of a year earlier, but
new multi-family construction-condos and rental housing-tumbled
57 percent. "The first-time home buyer tax credit that expired
at the end of April boosted demand for single-family and lessened
demand for multi-family," Simonson said. "Those distortions
have now ended, although Congress voted to extend the closing deadline
until September 30 for families that had signed contracts by April
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