Government Limiting Construction Industry's Recovery

The four largest public categories, accounting for three-fourths of public construction spending, all declined in April: transportation facilities was down 3.8 percent, highway and street construction was down 1.6 percent, educational was down 2.7 percent, and sewage and waste disposal construction was down 2.5 percent.

Although overall construction spending inched up for the second straight month in April (by 0.4 percent), the steep drop in public construction, which fell for the seventh straight month in April (by 1.9 percent to a four-year low) is cause for concern, according to the Associated General Contractors.

''It appears that federal stimulus and military base realignment work are tapering off, while state and local budgets for infrastructure have been shrinking for some time,'' Ken Simonson, AGC's chief economist, said in the statement.

AGC officials said the mixed results show the importance of enacting long-term infrastructure funding bills for transportation, wastewater and drinking water.

''Economic recovery will remain sluggish and uneven unless construction and the sectors that depend on it share in growth,'' said Stephen Sandherr, AGC CEO.

- Courtesy of AASHTO