AGC reports decline in infrastructure investments

by Carly Midgley | November 21, 2016 12:40 pm

A recent analysis by the Associated General Contractors of America (AGC) suggests public-sector investments in infrastructure are declining, despite the year’s generally strong growth in multi-family and private non-residential spending categories.

“There is still plenty of oomph in private demand for construction and growing support for school construction, but public infrastructure investment is crumbling just when it is needed most,” says AGC’s chief economist, Ken Simonson. “These conflicting trends have left total construction spending nearly flat for the past 15 months.”

Increases have been observed in certain categories, but the general trend is one of decline. From August to September:

• public construction spending decreased by 0.9 percent (its sixth decrease in seven months);
• private non-residential construction spending decreased by one percent, and its largest segment, power construction (e.g. oil and gas pipelines), decreased by 1.4 percent, with its next-largest—manufacturing—decreasing by 1.5 percent;
• commercial construction (including retail, warehouse, and farm construction) spending decreased by 2.4 percent; and
• multi-family residential construction spending increased by two percent.

For year-to-date spending from January to September:

• public construction spending decreased by 2.2 percent from 2015;
• public education spending increased by 3.8 percent, but public infrastructure spending faced a general decrease;
• public highway and street construction spending decreased by 0.7 percent, and other transportation-related construction spending (such as airports and transit) decreased by 4.8 percent;
• sewage and waste disposal construction spending decreased by 8.9 percent;
• conservation and development spending decreased by 4.5 percent;
• private non-residential construction spending increased by 7.8 percent, with its largest segment, power construction, increasing by 7.4 percent, and its next-largest, manufacturing, decreasing by 2.5 percent;
• commercial construction spending increased by 8.6 percent;
• private office construction spending increased by 27 percent;
• private residential construction spending increased by 5.8 percent; and
• multi-family residential construction spending increased by 18.8 percent.

AGC officials say this decline in infrastructure investment will impede the sector’s ability to recover. They encourage political leaders to pass measures supporting infrastructure development.

“Public-sector funding cuts for infrastructure aren’t just hurting the construction industry, they are also slowing commutes and undermining quality of life in many communities,” says Stephen E. Sandherr, AGC’s chief executive officer.

Source URL: https://www.constructionspecifier.com/agc-reports-decline-in-infrastructure-investments/

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