Construction spending ends 2014 at highest level since 2008
Public outlays turn positive, adding to strength in private segments
Construction spending rose in December to a six-year high of $982 billion as public construction for the year increased for the first time since 2009, according to an analysis by AGC of America. Association officials said President Obama’s budget proposal and his suggested infrastructure funding program should help construction spending continue to grow by accelerating debate about the best way to fund repairs to the nation’s aging roads, bridges, and other public infrastructure.
“For the first time in nearly a decade there was growth in all three major construction segments-public, private nonresidential and residential,” said Ken Simonson, the association’s chief economist. “If the president and Congress can work out a way to pay for long-term investments in our aging infrastructure, there is a good chance this pattern will repeat in 2015.”
Construction spending in December totaled $982 billion at a seasonally adjusted annual rate, 0.4% higher than in November, 2.2% higher than in December 2013, and the highest monthly figure since December 2008, Simonson noted. The full year total of $961 billion was up 5.6% from 2013 and was the highest full year amount since 2008.
Private residential spending in December climbed 0.3% from November but slid 4.0% from a year earlier, while private nonresidential spending slipped 0.2% for the month but rose 5.3% year-over-year. Public construction spending increased 1.1% from November and 6.7% from December 2013. For the full year, private residential spending rose 4.1%, private nonresidential spending climbed 11%, and public spending grew 1.8%.
“The hottest segments in 2014 as a whole were warehouses, which leaped 50%, and multifamily, which climbed 34%,” Simonson added. “Both of these categories should do well again in 2015.”
Other private nonresidential segments that grew steeply in 2014 included offices (24%); manufacturing (16%); power, including oil and gas pipelines and field work (14%); and commercial—retail, warehouse and farm (13%), Simonson observed. He noted that office and retail construction included many renovation projects as well as new starts.
The two biggest public segments both grew in 2014: highways and streets (4.1%) and education (1.2%). In addition, public spending on transportation facilities such as transit, airport and ports rose 4.9%, Simonson said.
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