Construction spending dipped from October to November, but resolution of the uncertainty regarding federal taxes for 2013 should unleash more private construction investment, according to an analysis of new federal data released this month by the Associated General Contractors of America.
Association officials warn, however, that unresolved issues about federal construction spending, including storm relief for northeastern states, will hold down public construction spending.
"Preliminary data from the Census Bureau for November shows overall construction spending slipped 0.3 percent from October's total after seven months of steady gains," says Ken Simonson, the association's chief economist. "The more significant comparison, however, is with year-ago levels, and the November report shows a respectable 7.7 percent gain over the past 12 months."
Simonson says private single-family and multifamily spending continued growing strongly. Spending on new single-family houses climbed 1.3 percent for the month and 29 percent year-over-year, while multifamily spending rose 0.5 percent and 46 percent, respectively.
Simonson points out four categories of private nonresidential construction that posted increases of more than 10 percent between November 2011 and November 2012, although results for the latest month were mixed: lodging construction, office construction, private transportation construction, principally by rail and trucking companies, and power and energy construction.
Simonson says public construction spending, which has alternated between monthly increases and decreases in 2012, sank 0.4 percent in November and 2.6 percent year over year.
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