Construction Spending Reaches Highest Level Since 2009

Source: CCIM.com

Overall U.S. construction spending rose to a 2.5-year high in June, according to the Associated General Contractors of America. Total construction spending gained 0.4 percent in June and 7.0 percent year-over-year. “The improvement is showing up in a wide range of residential and nonresidential categories,” said Ken Simonson, AGCA’s chief economist. (See chart.)

Reasons for the uptick include the unusually mild winter in most parts of the Northeast and Midwest, which allowed many projects to progress faster than expected during 1Q12, according to Kermit Baker, American Institute of Architects’ chief economist. Acceleration is expected to continue with a 6.2 percent construction gain projected for 2013.

Though an upturn in nonresidential construction activity is usually preceded by a housing recovery, the single-family home market has not contributed much to the current construction turnaround, according to the AIA. Exports to international markets and commercial/industrial facility activity have contributed to this year’s construction gains.

Year-Over-Year Non-Residential Construction Gains

June 2011-June 2012

Power and energy (including oil and gas-related projects), 26%

Hotels, 26%

Manufacturing, 19%

Education, 19%

Transportation (trucking and rail facilities), 17%

Source: Associated General Contractors of America

Advertisements
This entry was posted in #cre, Commercial News, Uncategorized and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s