Highways on the rise

There were a few bright spots in the construction market last month. "Total construction spending rose modestly in February, but that understates the sizzling gains in most categories other than single-family homebuilding," said Ken Simonson, chief economist for The Associated General Contractors of America. Simonson was commenting on the March 30 construction spending report from the Census Bureau. "Total construction spending rose 0.3 percent in February, seasonally adjusted, following two months of decreases," Simonson said. "That masks a 1.5 percent jump in nonresidential spending, a 2.7 percent increase in residential improvements, and no change in new multifamily construction. Those gains outweighed the freeze in new private single-family construction, which tumbled 2.9 percent for its 11th straight decrease. Compared to February 2006, private nonresidential construction was up 16 percent, public construction was 10 percent higher, residential improvements climbed 17 percent, multifamily edged up 2 percent, but new single-family construction was off 28 percent. The two big public categories--highways and streets, and education--accounted for a bit more than half the public total." In February, highway construction was 11 percent higher than a year before, and educational was up 7.6 percent, similar to the 2006 pattern. The next largest public category, transportation facilities, jumped 17 percent. "For the year, public construction should continue to rise, but some contracts will be delayed because materials costs are likely to push bids beyond the level that agencies had budgeted for," said Simonson. Your comment?