Construction spending edges up in March
Although construction spending increased 0.2 percent in March compared to last month, spending still sits 2 percent less than March 2006, according to an April 30 report from the U.S. Census.
Spending for the first quarter of 2007 reached $250.3 billion, down 2.4 percent compared to the same period last year, according to the release. The increase in March follows a 1.5 percent increase in February.
While residential construction was down 1 percent for the month and 14.2 percent year-over-year, non-residential construction increased 1.4 percent for the month and 13.2 percent year-over-year.
The building segments leading the nonresidential category were lodging, up 12.6 percent for the month and 64.4 percent year-over-year; office, up 0.2 percent for the month and 27.1 percent year-over-year; and heath care, up 0.8 percent for the month and 16 percent year-over-year.
Ken Simonson, chief economist for the Associated General Contractors of America in Arlington, Va., said in a same-day AGC release that he expects office construction and some retail building to slow for the rest of the year. “The [office market], along with some retail construction, will be dragged down by a continuing steep decline in new single-family construction,” he said in the release.
Simonson forecasts lodging and health care spending to see gains for the rest of 2007, along with modest increases in public construction. He warns, though, that “public construction … will be pressured by rising costs for construction materials and components.”
Read more about rising material costs in the Financials section of this week’s e-glass weekly, or click here.
To view full census data for March construction spending, click here.