Construction Spending Dips in November
Drop of 0.4 Percent Versus October
Construction spending dipped slightly in November, declining 0.4 percent to $1.122 trillion, compared to October's $1.127 trillion, the U.S. Census Bureau said.
November's figure is, however, 10.5 percent higher on a year-over-year basis.
Private sector construction spending came in at $828.2 billion in November, or 0.2 percent lower than October's $829.7 billion.
Residential building totaled $427.9 billion, or 0.3 percent above October's $426.8 billion. Nonresidential construction amounted to $400.3 billion, 0.7 percent lower than the $402.9 billion recorded in the previous month.
In the public sector, $294.3 billion was spent on building projects in November, which is 1.0 percent below the $297.3 billion in October. Educational construction was at $71.2 billion, or5.0 percent above the October level of $67.8 billion.
Highway construction, at $90.7 billion, was 1.3 percent below October's $92.0 billion.
Residential Spending Up, Multifamily Down
"The November data show divergent trends for residential, private nonresidential and public construction," said Ken Simonson, chief economist for the Associated General Contractors of America.
"Compared to October levels, spending dipped overall but climbed for homebuilding, school and office construction," Simonson noted. "Previously fast-growing categories such as multifamily, manufacturing and lodging construction have stalled for the past two to four months. Yet nearly every type of construction has outperformed its 2014 pace through the first 11 months of 2015."
While November's total was slightly lower than October, Simonson noted it was only 0.5 percent higher than August, suggesting construction activity is leveling off.
Private residential spending increased 0.3 percent for the month and 10.8 percent over the past 12 months. Spending on multifamily residential projects declined 0.7 percent in November, but was 25 percent higher year-over-year, while single-family spending rose 0.6 percent and 9.3 percent, respectively.
Manufacturing construction declined 4.0 percent in November, but increased 29 percent year-over-year. In contrast, private office construction rose 1.7 percent and 23 percent, respectively.
Public construction sank 1.0 percent in November, but climbed 6.0 percent year-over-year. Of its two biggest public categories, highways and streets dropped 1.3 percent for the month, but rose 5.6 percent year-over-year, while educational facilities jumped 5.0 percent in November and 15 percent for the year.
Source: Associated General Contractors of America
Construction Industry Starts 2016 On Good Note
The construction industry will receive a tremendous shot in the arm this year, thanks to the 2016 Omnibus Appropriations bill.
Because of this legislation, the federal government will substantially increase funding for many of its construction programs. It will also extend renewable energy tax credits for wind, solar and geothermal projects.
The General Services Administration's construction and acquisition account will receive $1.6 billion, triple what had been doled out to this agency in the past. About $948 million of GSA's appropriation will be used for new courthouses.
Funding to the Department of Veterans Affairs will more than double to $1.2 billion.
The federal highway obligation ceiling has been increased by 5 percent to $42.4 billion, and the Federal Transit Administration's budget has been lifted 8 percent to $11.8 billion. These hikes will result in heightened spending for infrastructure.
Military construction jumped 16 percent to $7.2 billion, and the Army Corps of Engineers will receive a 10 percent boost in funds to $6 billion.