Landscape Architect Articles

Construction Spending Grows in March05-01-06 | News

Construction Spending Grows in March

WASHINGTON D.C. ?EUR??,,????'??+ Construction spending during March 2006 was estimated at a seasonally adjusted annual rate of $1.2 trillion, according to a report released Monday by the Commerce Department. This figure us .9 percent above the revised February estimate of $1.189 trillion, and 8.4 percent of the March 2005 estimate of $1.106 trillion.

During the first three months of this year, construction spending amounted to $253.5 billion, 9.2 percent above the 232.1 billion for the same period in 2005.

?EUR??,,????'??The construction engine was firing on all cylinders in March,?EUR??,,????'?? said Ken Simonson, chief economist of The Associated General Contractors of America (AGC). ?EUR??,,????'??On a year-to-date basis, which discounts the odd weather patterns of the first three months this year, the gain was 9.2 percent compared to the January-March 2005 period,?EUR??,,????'??

Spending on private construction was at a seasonally adjusted annual rate of 940.8 billion, 1.1 percent above the revised February estimate of $930.9 billion. Residential construction was at a seasonally adjusted annual rate of $672.9 billion in March, 1.6 percent above the revised February estimate of $662.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $267.9 billion in March, .1 percent below the revised February estimate of $268.3 billion.

?EUR??,,????'??There was great balance among the major sectors,?EUR??,,????'?? Simonson said. ?EUR??,,????'??Private nonresidential construction was up 10.6 percent year-to-date, while private residential and public construction each gained 8.8 percent.?EUR??,,????'??

In March, the estimated seasonally adjusted annual rate of public construction spending was $258.2 billion, .2 percent above the revised February estimate of $257.8 billion. Educational construction was at a seasonally adjusted annual rate of $68.6 billion, .8 percent below the revised February estimate of $69.2 billion. Highway construction was at a seasonally adjusted annual rate of $69.4 billion, .4 percent below the revised February estimate of $69.7 billion.

?EUR??,,????'??On the public side as well, almost every category was higher than in the first quarter of 2005,?EUR??,,????'?? Simonson said. ?EUR??,,????'??The two leading categories, educational and highway and street construction, were up 14 and 7.7 percent, respectively, while the third biggest segment, sewage and waste disposal, was 28 percent higher.?EUR??,,????'??

Despite the encouraging growth seen in March, Simonson said contractors must deal with escalating prices of a variety of materials.

?EUR??,,????'??Asphalt, diesel fuel, copper, polyvinyl chloride (PVC) pipe and other plastics, concrete, and gypsum costs are all advancing at double-digit rates,?EUR??,,????'?? he said. ?EUR??,,????'??Worse, contractors have already reported shortages of cement, with asphalt shortages expected soon. And today, the Institute for Supply Management said some members reported steel shortages in April.?EUR??,,????'??