Construction Spending Reaches Highest Level Since December 2009
August 1, 2012

Construction spending in June rose to a 2-1/2 year high as double-digit percentage increases in private residential and nonresidential construction offset an ongoing downturn in public construction, according to an analysis of new federal data released today by the Associated General Contractors of America (AGC).

"The June spending gains come on top of upward revisions to May and April totals, reinforcing the notion that private construction is now growing consistently," says Ken Simonson, the association's chief economist. "Even more encouraging, the improvement is showing up in a wide range of residential and nonresidential categories."

According to Simonson, total construction spending gained 0.4 percent for the month and 7.0 percent year-over-year. Private nonresidential spending climbed for the fourth consecutive month and was 14 percent higher than in June 2011.

AGC reports major growth from June 2011 to June 2012 in several specific nonresidential categories, including
power and energy construction (including oil and gas-related projects) with a rise of 26 percent; hotels with an increase of 26 percent; manufacturing and educational with an increase of 19 percent each; and transportation (mainly trucking and rail facilities) with a 17 percent gain. There also were 7 percent year-over-year increases in health care, commercial (retail, warehouse and farm) and office construction, according to AGC..

"Private nonresidential and multifamily construction should continue to grow in the second half of 2012 and beyond," Simonson predicts. "As a result, total construction spending in 2012 will be positive for the year for the first time since 2007 even though public construction will remain in the doldrums."

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