Construction Spending Inches Up in DecemberAssociation of Construction & Development
February 6, 2014 — 1,307 views
Construction spending in the US was up by 0.1 percent in December and increased by 4.8 percent for the 2013 year, according to an analysis by the Associated General Contractors of America, based on US Census Bureau data released by the Department of Commerce recently.
The construction spending in December was valued at a seasonally adjusted annual rate of $930-5 billion, higher than the revised November value of $929.9 billion, data shows.
The increase in December came on the back of a 2.6 percent hike in private residential construction, while single-family home spending went up by 3.4 percent in December, up 21.6 percent from the year before. Apartment and condominium construction went up 0.5 percent in December, a raise of 27.3 percent from December 2012.
Statistics reveal that more people are renting instead of buying, therefore creating the demand for more apartments – developers and builders seem to take up more construction as a consequence.
Ken Simonson, chief economist of AGC, says that residential construction should stay on the positive side for several months in the near future at the minimum. He expects that total residential spending will rise by 10 percent or thereabouts, though the growth in single-family residential construction may not grow at the same rate. The value of residential construction in 2013 was $330.7 billion, 18 percent higher than $280.3 billion in 2012.
However, private non-residential spending has seen a dip of 0.7 percent for December and 0.4 percent for the whole year. The value of private non-residential construction was $296.5 billion, a drop from $297.7 billion in the year 2012, census data reveals.
According to Simonson, the current increase in oil and gas-related activities would give greater thrust to some types of non-residential construction in 2014. Apart from manufacturing plants, he anticipates more work on projects such as pipelines. Also, he explains that people living in drilling regions will get greater housing, retail, and commercial projects, which should boost non-residential spending to a growth of 6-10 percent in the year 2014.
Public construction spending dropped by 2.3 percent for December and 2.8 percent for the whole year, data shows. Construction spending in the highways and street category rose by 1.8 percent in December 2013 and 1 percent for the whole of that year, AGCA authorities note. The Census data shows that the value of public construction was at $271.2 billion in 2013, down from $279 billion that was spent in 2012.