Construction Spending Rose 3.0% YOY in February

Arlington, VA, April 4, 2017—Construction spending in February totaled $1.192 trillion at a seasonally adjusted annual rate, up 0.8% from January and 3.0% from the February 2016 level, according to an analysis by the Associated General Contractors of America.

Association officials said the February data indicates the need for Congress and the Trump administration to work together to reform dated tax codes and to boost investments in aging infrastructure to boost broader economic growth that will stimulate more demand for construction.

"While the overall market for construction continues to expand, public investments remain down for the year and private nonresidential activity could be much stronger," said Ken Simonson, the association's chief economist. "Two factors that are clearly holding back construction demand are relatively high effective tax rates for many businesses and uncertainty about future demand for public infrastructure upgrades."

Private residential construction spending increased by 1.8% between January and February and rose 6.4% over the past 12 months. Spending on multifamily residential construction increased 2.0% for the month and 10.6% year-over-year, while single-family spending climbed 1.2% for the month and 3.4% from a year earlier.

Private nonresidential construction spending declined 0.3% for the month but increased 7.5% year-over-year. The largest private nonresidential segment in February was power construction (including oil and gas pipelines), which gained 3.0% for the month and 9.4% over 12 months. The next-largest segment, commercial (retail, warehouse and farm) construction, declined 0.8% in February but rose 13.6% year-over-year. Manufacturing construction fell 1.7% for the month and 9.8% from a year before. Private office construction spending grew by 0.5% for the month and 24.8% compared with February 2016.

Public construction spending inched up by 0.6% from January to February but declined by 8.0% from the February 2016 rate. Highway construction increased by 1.3% for the month but is down 5.1% year-over-year. Other transportation segments (transit, passenger rail, airports and ports) inched up 0.8% for the month but are down 10.4% relative to February 2016. Sewage and waste construction expanded by 0.1% for the month but plummeted by 27.3% for the year. Water supply spending declined 1.5% and 15.2%, respectively.

Print the Article