New York Construction Spending Reaches Three Year Peak

US construction spending has reached its highest peak for three years, reaching a yearly rate of $852 billion (£528 billion).

The figures from September highlighted growth in private construction in both residential projects, such as apartments and houses, as well as non-residential projects. However, it also showed a continuing decline in public construction.

The Associated General Contractors of America released the analysis of new federal data, with officials expecting these trends to resume. Though overall spending is up, construction spending had dropped in August, and many categories are still lower compared to September last year.

US Construction Spending

Ken Simonson, chief economist from the AGCA, said, "It is heartening to see the growth in total spending, but the progress remains fragile and fragmentary."

Despite the damage caused by super-storm Sandy, Simonson said this would not majorly affect public construction spending.

"In the wake of the massive losses from this week's storm, many construction priorities will be reordered, but overall private and public spending patterns are likely to stick unless federal and state lawmakers devote more funds to construction."

September 2012 saw a 0.6% monthly increase in spending, and 7.8% since the same time last year. This is the highest total spending since October 2009. Private residential construction rose by 2.8% from August, and 21% for the year. Private non-residential spending dipped 0.1% during the month but was still up 8.8% for the past 12 months.

Within the private sector, residential categories particularly excelled. New single-family construction grew 3.9% since August and 26% since September 2011. New multi-family construction increased 1.3% for the month and 49% for the year. Existing residential structure improvements, rose 2% in September, and 12% from the same month in 2011. This category is likely to be boosted from the storm's aftermath.

Overall, public construction dipped 0.8% since August, and 4.2% since last year. Highway and street construction spending shrunk 1.6% for the month and 2.4% from September 2011. Educational construction spending dropped 0.8% and 6.9% in the same time periods.

"Lawmakers cannot merely raid one part of their construction budgets to make urgent repairs at a time when funding for infrastructure is already inadequate," Simonson said. "Stabilisation and restoration of the hard-hit infrastructure in the northeast should supplement, not crowd out, long-needed projects elsewhere and in that region and nationwide."

Image Copyright Tequask - Wikimedia Commons