Non-residential construction still hurting

by Wally Northway

Published: November 4,2009

Tags: construction, recession

WASHINGTON — Despite the increase in housing construction, private non-residential construction spending slipped 1.8 percent in September, according to the Nov. 2 report by the U.S. Census Bureau.

On a year-over-year basis, private non-residential construction spending is down 15.4 percent. Meanwhile, total non-residential construction spending, which includes both private and public construction, fell 0.4 percent to $676.2 billion from August and is down 6.5 percent from Sept. 2008.

Infrastructure-related construction accounted for most of the increases from August to September with public safety construction up 2.4 percent, and both transportation along with sewage and waste disposal-related construction sectors, 2 percent higher. Water supply construction posted a 1.7 percent increase, while highway and street construction saw a modest gain of 1.1 percent.

Those subsectors with the largest year-over-year increases include conservation and development, up 11.1 percent, manufacturing, up 11 percent and transportation-related construction up 10.9 percent.

However, any gains in construction spending between August and September were offset by declines in conservation and development construction, down 8 percent, manufacturing, down 2.8 percent, lodging, down 1.7 percent, and power-related construction, down 1.2 percent. The three subsectors that continue to report the largest decreases on a year-over-year basis are lodging, down 37.7 percent, commercial construction, down 33.5 percent, and office construction, down 25.5 percent.

“It would be difficult to view this construction spending report as purely good news. After all, overall non-residential construction volume continues to trend lower on a monthly basis, an indication that this segment of the nation’s economy remains mired in its own recession,” said Associated Builders and Contractors (ABC) chief economist Anirban Basu. “However, there is certainly more than a bit of good news present in this month’s release. It has become quite apparent that the stimulus package is now working its way through the economy and the construction sector.”

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