Construction spending growth shows 'vigorous recovery is finally at hand'

Sep 3, 2014
Austin Business Journal

Construction spending reached its highest level since 2008 in July, according to the Census Bureau, and industry economists think the party is just getting started


Spending on both private and public construction increased in July, reaching a seasonally adjusted annual rate of $981.3 billion. That’s more than 8 percent higher than last July’s rate


Ken Simonson, chief economist for the Associated General Contractors of America, said “private nonresidential construction should remain strong through the rest of 2014 and beyond, while residential spending is likely to keep growing, though at a more moderate pace”


Simonson’s one cautionary note: “Funding is still inadequate for needed public infrastructure improvements”


Wall Street is doing its part to fuel construction spending, with recent rallies in both the stock and bond markets, Basu said


The domestic energy boom is creating lots of work for construction companies. Spending on power construction, which includes oil and gas fields, pipelines and electric utilities, is up 29 percent compared with a year ago, Simonson noted


Manufacturing construction is up 25 percent, and office construction is up 20 percent


Construction is down compared with a year ago in health care, education and communications


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