The U.S. Census Bureau reported that total construction spending advanced 0.8% in October following a 0.2% increase in September, the sixth monthly increase in the last seven months, according to Bernard M. Markstein, Reed Construction Data's U.S. chief economist. October total construction spending was $798.5 billion at a seasonally adjusted annual rate. Year-to-date construction spending was down 2.9% compared to the same period a year ago.
Nonresidential building fell for the second month in a row, down 1.6% to $279.6 billion, while heavy engineering (non-building) construction spending rose 1.3% to $271.7 billion in October, says Markstein. Residential construction spending was up 3.2%, mainly due to improvements, which were up a strong 6.6%, while new residential construction spending nudged up 0.3%.
Total public construction spending in October returned to its general downward trajectory, falling 1.8% after a revised 0.3% increase in September and a 2.5% rise in August, according to Markstein. The downward trend for public spending will persist throughout the rest of this year and into next as local governments continue to tighten their belts in order to balance their budgets. Little help is expected from Washington to offset these cuts in public infrastructure spending, though some may eventually come from individual states that are seeing revenues improve. Meanwhile, private construction spending rose 2.3% in October.
Reed Construction Data projects a 2.6% decline in total construction spending this year as the national economy emerges from its period of slow growth. Reports with positive economic data continue to accumulate, suggesting that the United States will avoid falling into a new recession over the next several months. Assuming no recession, the RCD forecast is for total construction spending to increase 4.4% in 2012 and 6.2% in 2013.To read the full report, visit Reed Construction Data.