Construction Spending Rose 4.9% to Record Rate in March

Arlington, VA, May 2, 2017-Construction spending is at record levels for the second straight month in March and is up 4.9% for the first three months of year compared to the same period in 2016, despite dipping slightly compared to February, according to an analysis by the Associated General Contractors of America.

Association officials said many firms are eager to see details of the President's pending infrastructure plan, which should boost construction demand.

Construction spending in March totaled $1.218 trillion at a seasonally adjusted annual rate, essentially unchanged from the month before. The year-to-date increase of 4.9% for January through March 2017, compared with the same months of 2016, shows demand for construction continues to experience robust growth.

The construction official noted that private nonresidential spending declined by 1.3% for the month and is up 6.4% year-to-date. The largest private nonresidential segment in March was power construction (including oil and gas pipelines), which fell by 0.6% for the month but is up 8.2% year-to-date. The next-largest segment, manufacturing, expanded by 0.5% for the month but is down 9.8% year-to-date. Commercial (retail, warehouse and farm) construction dropped by 3.2% in March but climbed 12.7% year-to-date. Private office construction decreased by 2.6% for the month but grew by 17.7% year-to-date.

Private residential construction spending edged up by 1.2% between February and March 2017, and was up 7.5% year-to-date. Spending on multifamily residential construction increased by 2.0% for the month and is up 7.4% year-to-date, while single-family spending inched up 0.3% from February to March and is up 4.7% year-to-date.

Public construction spending declined 0.9% from a month before and is now down by 6.5% for the first three months of 2017. The biggest public segment-highway and street construction-increased by 0.5% for the month but is down 2.4% year-to-date. The other major public category-educational construction-fell by 2.0% in March and by 2.6% for the combined January-March period.

Association officials said that the decline in public construction spending highlights the need for new infrastructure proposals like the one being developed by the Trump administration. They added that many firms are eager for the administration to release details about the new plan. And they said significant new investments in infrastructure will help boost overall economic activity and support greater demand for construction services.

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