Construction Spending Hits Three-Year High in September
November 2, 2012

Construction spending rose at an annualized rate of $852 billion during September, a nearly three year high as spending on houses, apartments and private nonresidential projects offset declining public construction, according to an Associated General Contractors of America. Association officials said they expect both the public and private sectors will continue to show growth despite Hurricane Sandy's presence.

"It is heartening to see the growth in total spending, but the progress remains fragile and fragmentary," says Ken Simonson, the association's chief economist. "In the wake of the massive losses from this week's storm, many construction priorities will be reordered, but overall private and public spending patterns are likely to stick unless federal and state lawmakers devote more funds to construction."

According to Simonson total construction spending rose 0.6 percent for the month and 7.8 percent from September 2011 to September 2012. This total is the highest level since October 2009. Private nonresidential construction fell 0.1 percent for the month, however it remains up 8.8 percent for the year. Public construction declined 0.8 percent in September and 4.2 percent year-over-year. For the third straight month public construction shrank. Highway and street construction spending fell 1.6 percent in September and 2.4 percent year-over-year, while educational construction spending declined 0.8 percent and 6.9 percent.

Private nonresidential categories rose 1.1 percent for the month and 20 percent over 12 months. Manufacturing construction was also up 3.8 percent in September and 1.3 percent year-over-year. Commercial construction however dropped 3.8 percent in September but posted a 12-month gain of 4.4 percent.

In addition, private residential spending increased by 2.8 percent for the month compared to August, which also grew 21 percent during the past 12 months. New single-family construction increased 3.9 percent for the month and 26 percent over 12 months. New multi-family construction rose 1.3 percent for the month and 49 percent since September 2011.

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