OUR THOUGHTS ON:

Record Drop in Construction Spending

Construction

By Matt McKinnon

According to the U.S. Department of Commerce, the largest drop in construction spending in over a year was recorded in August 2012. The government report indicated spending fell 0.6 percent, the largest drop since July 2011. Although residential projects continue to show a rebound, lagging non-residential structures and public sector work drove the overall decline.

The Numbers

• Total construction spending in August 2012 was $837.1 billion, down from $842 billion in July 2012, but up from $786.3 billion in August 2011.
• Private sector jobs decreased 0.5% to $562.2 billion in August 2012, up 12.1% compared to August 2011.
• Public construction spending decreased 0.8% to $274.8 billion in August 2012, but continues to be down (3.5%) as compared to August 2011.

Industry Specifics

Private sector construction continues to show increases in new multi-family and lodging projects in 2012. Religious and amusement/recreation projects, however, continue to decline, year over year. Within the public sector, power and highway/street projects continue to grow over 2011. Office and educational project segments, however, fell yet again.

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