Construction Stats Reflect Economic Woes

Total construction spending in the United States fell 0.3 percent in September, according to monthly statistics released by the U.S. Census Bureau. The September figure is 6.6 percent below the estimate for September of last year.

The nonresidential construction sector—which had been something of a bright spot in the long-suffering construction industry—posted only a weak gain in September. “Nonresidential construction is on the very of a potentially long slide,” says Ken Simonson, the chief economist for the Associated General Contractors of America (AGC). “The Census figures show nonresidential spending eked out a gain in September of 0.1 percent. But private nonresidential spending was down nearly 1 percent from its high-water mark in June, while public spending tumbled 1.3 percent in September alone.”

According to Simonson, contractors have been reporting that developers put lots of projects on hold because of the credit freeze and weakening demand for stores, offices and other facilities. At the same time, states had to postpone construction bond issues or defer budgeted projects to meet balanced budget mandate.