Nonresidential construction is expected to remain positive all year.
construction spending rose a tad in March following a big upward revision for
February, as single-family homebuilding finally held steady and nonresidential
construction boomed again,” said Ken Simonson, chief economist for The
Associated General Contractors of America (AGC). Simonson was commenting on the
April 30, 2007, construction spending report from the Census Bureau.
construction spending rose 0.2% in March, seasonally adjusted, while the gain
for February was revised from 0.3% to a huge 1.5%,” Simonson remarked. “New
private single-family construction edged up 0.1% for the month, though it was
down 27% from a year ago. The next largest category, the hard-to-measure
residential improvements, more than reversed a big February gain but were still
19% ahead of the March 2006 total. New multifamily construction showed modest
gains for both periods - up 0.2% for the month and 1.5% year-over-year.
nonresidential surged another 2.4% for the month and 17% year-over-year,”
Simonson continued. “All 11 of the Census Bureaus’ categories were up for the
month and all but religious structures were up from March 2006.
or subcategories that did even better compared to March 2006 included lodging,
up 59%; offices, 31%; the multi-retail portion of commercial (general
merchandise stores, shopping centers and malls), 23%; electric power, 22%;
communication, 20%; and hospitals, 18%.
2007 as a whole, I expect the biggest private gainers to be power- and
energy-related projects, some of which Census includes in manufacturing;
lodging; and hospitals,” Simonson concluded. “The office market may cool if
sluggish overall economic growth causes big firms to slow hiring of office
employees and the small-office market loses real estate agents, mortgage
brokers and title companies, as I anticipate. That market, along with some
retail construction, will be dragged down by a continuing steep decline in new
single-family construction. Public construction should remain modestly positive
but will be pressured by rising costs for construction materials and
For more information, visit the AGC Web site atwww.agc.org.
April 30, 2007 - Construction Marches Ahead Following February Upturn
April 30, 2007