RCD forecasts construction spending will increase 6.5% in 2012

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Reed Construction Data (RCD) forecasts total construction spending to increase 6.5% in 2012 and 5.9% in 2013. Continued positive economic reports indicate that the U.S. economy is on more solid footing.  Fourth quarter real (inflation  adjusted) gross domestic product (GDP) rose 2.8% (SAAR), its fastest  quarterly rate of growth since second quarter 2010. Nonfarm payroll  employment increased 243,000 in January following a 203,000 increase in  December.  The unemployment rate has fallen for five consecutive months  and stood at 8.3% in January compared to 9.1% a year earlier.

The U.S. Census Bureau reported that total construction spending  increased 1.5% in December following a 0.4% rise in November. December  total construction spending was $816.4 billion at a seasonally adjusted  annual rate (SAAR). For the year, construction spending was down 2.0%  from 2010.

Nonresidential building construction spending picked up in December  to $286.5 billion (SAAR), an increase of 1.7%, following a modest 0.1%  rise in November. For the year, spending was down 4.0%.

Heavy engineering (non-building) construction spending rose a healthy  2.0% to $281.3 billion (SAAR), its fifth consecutive monthly increase  and its seventh increase over the last eight months. For 2011, heavy  engineering construction spending was almost unchanged, down a modest  0.1% from 2010.

Total residential construction spending, which includes improvements,  was up 0.7% after falling 0.4% in November. New residential  construction spending, which excludes improvements, rose 1.2% following a  1.9% gain in November. Total residential construction spending for the  year ended down 1.7% from 2010, while new residential construction was  down 5.4%.

Total public construction spending advanced 0.5% in December after  increasing 1.7% in November and was at its highest monthly level since  January 2011. For 2011, spending fell 6.5%. The outlook for public spending continues to be for further declines as local governments  struggle to balance their budgets and as Congress strives to reduce the  federal government’s deficit. Some hope comes from the states, most of  which are seeing their revenues improve faster than expected. Meanwhile,  total private construction spending rose 2.1% in December, its seventh  monthly increase over the past nine months. For the year, private  construction spending increased 0.7%.  Read More.

 

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