MDM provides a synopsis of construction spending trends each month, with a look at the segments of construction that gained and lost during the month.
Summary
Construction spending in November 2013 increased 1 percent from October and 5.9 percent from November 2012. Here is the breakdown:
- Private residential construction spending was up 1.9 percent from October and increased 16.6 percent year-over-year.
- Private nonresidential construction spending was up 2.7 percent from October and increased 1 percent year-over-year.
- Public construction spending was down 1.8 percent from October down 0.2 percent year-over-year.
The November 2013 data was released Jan. 2, 2014.
Analysis
“Construction activity bounced back in November, due in part to the end of the federal government shutdown and an accompanying return to normalcy,” said Associated Builders and Contractors Chief Economist Anirban Basu.
Ken Simonson, chief economist for The Associated General Contractors of America, said nonresidential construction spending figures are even more positive than they appear, with most categories now positive year-over-year.
According to an AGC press release, a 3.3 percent increase in power construction – the largest private nonresidential category – was due in part to wind production tax credits for projects that broke ground before the end of 2013.
Forecast
“The recent acceleration in economic activity sets the stage for a much better 2014, both for the broader economy and the nonresidential construction industry,” said Basu at ABC. “We can expect nonresidential construction spending to expand during the first half of the year.”
AGC's Simonson said the 2014 outlook is favorable for many types of private nonresidential and multifamily construction. “Both the electricity and oil and gas components of power construction should do well in 2014,” he said. The forecast for public spending remains flat or negative, he said.
Segment Trends
According to Census Bureau data, the following construction segments overall had the greatest gains and declines in spending in November 2013 from November 2012. It is not broken out by private versus public sectors.
Winners: Largest Gains from November 2012
Lodging: +31.2%
Commercial: +17.4%
Residential: +16%
Manufacturing: +14.4%
Transportation: +9%
Losers: Largest Losses from November 2012
Power: -21.4%
Communication: -10.7%
Sewage and waste disposal: -5.9%
Religious: -5.6%
Health care: -0.3%
