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Construction Spending Lowest in a Decade


The U.S. Census Bureau of the Department of Commerce reported that construction spending during December 2010 was estimated at a seasonally adjusted annual rate of $787.9 billion, 2.5 percent below the revised November estimate of $807.8 billion. The December figure is 6.4 percent below the December 2009 estimate of $841.8 billion.  The value of construction in 2010 was $814.2 billion, 10.3 percent below the $907.8 billion spent in 2009.

That is the lowest level of construction spending in a decade.

Public Construction

In December, the estimated seasonally adjusted annual rate of public construction spending was $301.0 billion, 2.8 percent below the revised November estimate of $309.8 billion. Educational construction was at a seasonally adjusted annual rate of $68.2 billion, 3.7 percent below the revised November estimate of $70.8 billion. Highway construction was at a seasonally adjusted annual rate of $84.9 billion, 1.6 percent below the revised November estimate of $86.3 billion.

The value of public construction in 2010 was $306.8 billion, 2.7 percent below the $315.5 billion spent in 2009. Educational construction in 2010 was $74.4 billion, 13.6 percent below the 2009 figure of $86.1 billion and highway construction was $83.3 billion, 1.7 percent above the $81.9 billion in 2009.

Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $486.9 billion, 2.2 percent below the revised November estimate of $498.0 billion. Residential construction was at a seasonally adjusted annual rate of $226.4 billion in December, 4.1 percent below the revised November estimate of $236.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $260.5 billion in December, 0.5 percent  below the revised November estimate of $261.9 billion.

The value of private construction in 2010 was $507.3 billion, 14.3 percent below the $592.3 billion spent in 2009. Residential construction in 2010 was $241.4 billion, 1.7 percent below the 2009 figure of $245.6 billion and nonresidential construction was $265.9 billion, 23.3 percent below the $346.7 billion in 2009.

“These dismal results – coming just days after another government agency reported the overall economy grew for the sixth quarter in a row – show that the agony of the recession continues for millions of construction workers and their firms,” said Ken Simonson, chief economist for the Associated General Contractors of America. “Construction spending fell again in the last two months of 2010, and the preliminary total for the year was the lowest since 2000.”

Simonson noted that the outlook for 2011 is very mixed. “Spending on rental housing, warehouses, hospitals and factories should pick up,” Simonson commented. “Power construction should stay strong, and federal dollars for stimulus and base realignment or ‘BRAC’ projects will continue to sustain some contractors. But public school construction and other state and local projects will keep shrinking, while single-family homebuilding, retail and office construction are likely to remain feeble.”