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Public Construction Spending Still Strong11-30-07 | News

Public Construction Spending Still Strong

Construction spending on public healthcare projects rose a healthy 4.3 percent October, leading to another strong showing for construction spending on public projects.

Gains in several categories of public construction during October 2007 softened the blow to this industry as overall construction spending was down 0.8 percent for the month, according to a report by the Commerce Department.

Healthcare construction rose a healthy 4.3 percent in October, ending the month with a seasonally adjusted rate of $77.2 billion. Commercial construction in the public sector rose 4.1 percent in October and construction of public educational facilities rose 2.1 percent. The biggest gainer in the public sector was construction of conservation and development projects, rising 12.1 percent from September?EUR??,,????'???s close.

Ken Simonson, chief economist of the Associated General Contractors of America, predicts the power, hospital and education sectors will remain strong through early 2008.

Overall, the estimated seasonally adjusted annual rate of public construction spending was $295.1 billion in October, 0.8 percent above the revised September estimate of $292.8 billion.

Spending on private construction was at a seasonally adjusted annual rate of $863.2 billion, 1.4 percent below September?EUR??,,????'???s close. Spending on amusement/recreation projects was down 4.7 percent from September and construction spending on private power projects was down 5.8 percent. Construction spending on residential projects was down two percent from September due to reduced spending on private projects. Private residential construction was down two percent, but spending on public residential projects was up 2.9 percent.

In a separate report released by the Commerce Department, Sales of new single-family homes increased by 1.7 percent in October. The regional patterns of new home sales in October were generally positive. New home sales increased 1.8 percent in the Northeast, 14.2 percent in the Midwest and 6.8 percent in the South. Sales were down by 15.7 percent in the West. All regions but the Northeast were down substantially on a year-over-year basis.