News

Heavy Engineering Construction Spending Rose Modestly in September

0 6507 Market Intelligence

Heavy engineering (non-building) construction spending increased 0.7% on a seasonally adjusted (SA) basis in September after falling 1.6% in August. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending was up 8.6% from a year ago.

Heavy engineering (non-building) construction spending increased 0.7% on a seasonally adjusted (SA) basis in September after falling 1.6% in August. On a year-to-date not seasonally adjusted (NSA) basis, heavy engineering spending was up 8.6% from a year ago.

Highway and water and sewer construction spending were the only two major heavy engineering spending categories to decrease in September, down 1.6% and 0.6%, respectively. Despite three consecutive monthly declines, highway construction spending was 2.9% higher on a year-to-date basis than last year. Two other major categories were up on a year-to-date basis, transportation (+3.4) and power (+30.3).

U.S. Heavy Engineering (Non-Building) Construction
(billions of U.S. current dollars)

  Monthly Figures (1)
(latest actual values)
3-Month Moving Average Year-to-Date (NSA)
  Jul-12 Aug-12 Sep-12 Jul-12 Aug-12 Sep-12 Jan-11 to
Sep-11
Jan-12 to
Sep-12
Transportation 37.9 37.6 38.5 37.6 37.7 38.0 26.0 26.9
  Month-over-Month
  % Change
0.7% -0.7% 2.4% 2.6% 0.3% 0.8%    
  Year-over-year
  % Change (NSA)
11.7% 5.6% 10.2%       -9.7% 3.4%
Communication 17.3 16.7 17.8 17.2 17.2 17.3 12.8 12.4
  -0.6% -3.4% 6.4% 0.8% -0.3% 0.7%    
  0.3% -4.8% -8.0%       0.2% -3.2%
Power 92.0 88.5 89.7 91.0 89.8 90.1 51.7 67.3
  3.5% -3.7% 1.3% -0.8% -1.3% 0.3%    
  22.8% 16.5% 16.5%       -3.0% 30.3%
Highway 80.9 79.8 78.5 81.2 81.0 79.7 57.9 59.6
  -1.7% -1.4% -1.6% 0.6% -0.2% -1.5%    
  8.3% 2.3% -5.2%       -5.2% 2.9%
Water and Sewer 33.5 34.2 34.0 34.5 34.0 33.9 27.2 26.2
  -2.2% 2.1% -0.6% -2.2% -1.4% -0.3%    
  -8.9% -6.9% -6.8%       -11.8% -3.9%
Conservation & Development 5.8 6.2 6.4 6.1 6.0 6.2 5.7 4.6
  -4.0% 6.7% 2.8% -1.4% -1.1% 1.8%    
  -17.3% -19.3% -13.5%       7.1% -19.0%
Total (2) 267.4 263.1 265.0 267.6 265.7 265.2 181.3 197.0
  0.3% -1.6% 0.7% 0.0% -0.7% -0.2%    
  9.1% 4.2% 1.7%       -5.6% 8.6%

(1) Monthly figures are seasonally adjusted at annual rates (SAAR figures).
(2) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Calculations: Reed Construction Data

Heavy engineering construction continues to struggle with the challenge of reduced government funding. Some of the slack is being picked up by public/private partnerships. Also, businesses are involved in some heavy construction activity (e.g., connected to extraction of oil and natural gas through fracking). The Reed forecast for heavy engineering construction spending is an increase of 7.2% in 2012, 4.7% in 2013, and 6.7% in 2014.

U.S. Heavy Engineering (Non-Building) Construction
(billions of U.S. current dollars)

  Actual Forecast
  2009 2010 2011 2012 2013 2014
Transportation 36.7 38.3 34.9 36.8 41.3 45.1
   Year-over-year % Change 3.5% 4.5% -9.1% 5.4% 12.3% 9.2%
Communication 19.8 17.7 17.5 17.3 19.1 20.4
-25.4% -10.2% -1.1% -1.2% 10.1% 7.0%
Power 88.9 77.9 74.0 92.4 94.2 101.8
  9.6% -12.3% -5.1% 24.9% 2.0% 8.0%
Highway 82.2 82.5 78.9 79.5 83.7 87.7
1.0% 0.4% -4.4% 0.8% 5.3% 4.8%
Water and Sewer 40.3 41.3 36.8 35.1 35.0 36.7
  -5.1% 2.5% -11.0% -4.5% -0.2% 4.7%
Conservation & Development 5.8 7.2 7.4 6.2 6.4 6.7
9.9% 24.7% 2.8% -16.0% 3.8% 4.8%
Total (1) 273.5 265.0 249.4 267.3 279.8 298.4
0.5% -3.1% -5.9% 7.2% 4.7% 6.7%

(1) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data.

by Bernie Markstein

Leave a comment

Or register to be able to comment.