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Nonresidential Construction Spending Up

By Tom Watts
June 1, 2010
It is about time.

It is about time.

For the first time in over a year, private nonresidential construction spending increased 1.7 percent in April.

However, in a report issued by the U.S. Census Bureau, private nonresidential construction spending was down 24.6 percent.

Total nonresidential construction – which includes both private and public – is up 2 percent for the month, the second consecutive monthly increase. Since April 2009, total nonresidential construction spending is down 16.1 percent and now stands at $596.9 billion.

Associated Builders and Contractors Chief Economist Anirban Basu called it a “reversal of trends,” saying in recent quarters, nonresidential construction spending has been fueled by publicly-financed projects. However, in April, transportation-related spending was essentially flat, an indication that the impact of stimulus spending in that category may have peaked and that other nonresidential construction segments will need to expand if the overall construction industry's momentum is to continue.

Basu said on a year-over-year basis, the nonresidential segments that have expanded are all closely tied to the stimulus package passed in February of 2009.

On paper this seems like an upbeat report, but Basu points out that state and local government-financed construction will decline going forward as lower levels of government seek to shrink their collective balance sheets.

We still have a ways to go in the construction industry, but at least some signs are pointing in the direction of an economic upturn.

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Tom Watts is the associate editor of Roofing Contractor. He can be reached at 248-244-1738 or wattst@bnpmedia.com.
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