There were gains in residential, private non-residential and public investment, according to an analysis of new Census Bureau data by the Associated General Contractors of America. But association officials cautioned that the rise in public investment was likely to be short-lived and urged policy makers in Washington to make infrastructure investment a priority.
“It is encouraging to see growth in both monthly and year-over-year totals in private residential and nonresidential construction spending,” said Ken Simonson, the association's chief economist. “There are increasing signs that 2013 will be a good year for a wide variety of project types.”
Construction put in place totalled US$885bn in February, up 1.2% from the downwardly revised January level. The February 2013 total was 7.9% higher than in February 2012. Private residential construction jumped 2.2% for the month and 20% year-on-year. Private non-residential spending rose 0.4% for the month and 6.1% year-on-year. Public construction spending increased 0.9% for the month but slipped 1.5% over 12 months.
“There is little doubt that construction of new houses and apartments will continue to boom in the next several months, based on data covering recent housing starts and building permits, as well as reports of rising rents, occupancy rates and new-home sales in many markets,” Simonson commented. “On the non-residential side, there should be a lot of activity involving pipelines, manufacturing, railroads and trucking, and warehouses.”
Association officials said that federal infrastructure investment has been plunging even as several states have passed funding increases for projects. Federal investment in construction dropped 1.1% in February and 10% from a year ago, while state and local investment rose 1.1% for the month and was nearly level - down 0.5% - year-on-year. They urged the federal government to fund vitally needed investments in infrastructure projects.
“The nation has been underinvesting in infrastructure for years,” said Stephen Sandherr, the association’s chief executive officer. “With funding set through September, it is time for Washington to work on finding adequate funding in the next budget.”
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