Economic woes continue to affect the construction industry, as construction spending declined 8 percent in May, from the same time a year ago. This figure is surprising considering home building and stimulus funded public works increased from a year earlier, according to a new analysis of Census Bureau data by the Associated General Contractors of America.
“Stimulus has made a difference, but Congress needs to provide long term funding for transportation and water projects to assure further economic growth,” said Ken Simonson, chief economist for the AGC.
“Private non-residential construction sagged 25 percent from May 2009 to May 2010, while public construction edged down three percent, and private residential construction rose 11 percent,” he said.
There were year-over-year increases of 5.6 percent for highway and street construction. Simonson also noted that new single family home construction in May jumped 31 percent from the depressed levels of a year earlier, but new multi-family construction dropped 57 percent.
“My members are reporting a slowdown in activity. This is construction season, so people are busy, but people are concerned about what is in the pipeline after construction season ends,” said Mark Dunham, executive director of Idaho AGC.
“There is a great deal of concern about projects in the coming 12 months, primarily due to the fact that state and local governments have had to tighten their belts, and therefore there are not a lot of public building projects out there,” he said.