public infrastructure spending boosts construction numbers

While the winter months in many parts of the country usually means a decrease in construction work, spending on new public construction projects has helped to increase the industry’s overall numbers, according to a new report.

The Associated General Contractors of America has just released an analysis based on the latest Department of Commerce numbers showing that public construction spending in January was up by 2.6 percent over the previous month, and a very strong 12.6 percent from January of 2019.

Those numbers come as the industry is experiencing relatively flat growth in multifamily construction, with private nonresidential up by only 0.8 percent in January over December.

From year to year, private nonresidential was marginally up by 0.5 percent.

The largest construction gains in January were seen in water supply projects, up by 35.5 percent over December; conservation and development projects, with a 23.8 percent gain; and sewerage and waste disposal projects, which saw a 13.9 percent increase.

Categorizing the public infrastructure projects as “exceptionally robust in January,” Ken Simonson, chief economist with the AGC, said, “Demand for construction is benefitting from the strength of the overall economy and robust public-sector investments in many types of construction projects.”

The Commerce Department numbers also showed that spending on state and local government projects had jumped by 2 percent in January. Federal spending at the same time was up by 9.9 percent—the highest level recorded since the spring of 2012.

The largest public segment construction project numbers in January were seen in highway and street construction, with an 11.7 percent increase; and airport, transit, rail, and port projects up by 11.5 percent.
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A smaller, but still strong gain, was posted in education construction projects, up by 4.1 percent from January of 2019 to January of this year.

​By Garry Boulard

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