Construction spending increased 2.7% in April, the largest one-month percentage gain in a decade, to $869 billion at a seasonally adjusted annual rate, the Census Bureau reported on Tuesday. Nevertheless, the total was 10.5% lower than a year earlier. Public construction climbed 2.4% for the month but fell 4.4% year-over-year. Private nonresidential construction was up 1.7% in April but was 25% lower than in April 2009. Private residential spending rose 4.4% and 4.1%. Federal stimulus spending apparently drove significant increases in a range of public construction categories. For example, compared to March, spending on public drinking water supply facilities jumped 7.9%; public sewage treatment, 3.9%; and highway construction 3.6%. Spending on other public transportation modes was flat for the month but soared 29% compared to April 2009. In contrast, public educational construction spending, which received little stimulus support, only edged up 0.4% for the month and was 18% lower than a year earlier. Private nonresidential spending was boosted by strong gains in private power construction, 5.2%; manufacturing, 2.7%; and communication, 7.3%. Meanwhile, developer-financed categories, plagued by high vacancy rates and tight credit conditions, continued to tumble. Private lodging construction rose 0.8% for the month but was down 61% compared to April 2009; commercial (retail, warehouse and farm) was down 2.9% in April and 37% year-over-year; and private office was down 1.7% for the month and 36% year-over-year. Private residential construction figures were also mixed. New single-family construction climbed 3.4% for the month and 29% year-over-year, and improvements to existing single- and multi-unit construction rose 6.3% and 2.7% from a year earlier. But new multi-family construction-condos and rental buildings, which are developer-financed -slumped 1.9% in April and 57% from a year ago.
New orders for U.S. manufactured goods (excluding semiconductor manufacturing), up 12 of the last 13 months, increased 1.2% in April, seasonally adjusted, Census reported today. Sustained increases in orders are a favorable sign for demand for manufacturing construction, although there is still a lot of unused capacity. Orders for construction materials and supplies rose 0.6% and were up 6.2% in the first four months of 2010 combined, compared to the same months of 2009. Orders for construction machinery fell 11% but were 89% higher year-to-date. "Only a few states this year came up with new money to spend on transportation projects," Stateline.org reported on Wednesday. "In fact, says Jim Reed, a transportation expert at the National Conference of State Legislatures, no state this year has increased its gasoline tax, a traditional source of transportation money. Even last year, when states were already in the throes of the current budget crisis, just a handful hiked their gas taxes. One of the most widely discussed ideas to bring in transportation dollars is to erect toll booths along state borders, in an effort to get out-of-state motorists to pay for the upkeep of interstate highways. Connecticut, New Hampshire and Pennsylvania all have considered the concept, but none has gone forward with it....Kansas, recently cited for having the best roads in the country, approved an $8.2 billion transportation plan for the next decade, paid for with new bonding, a hike in vehicle fees and a share of a new state sales tax that takes effect in July. This year's transportation bill in Vermont is the largest in state history, with more than one-sixth of the $595 million package going toward bridge repair. The package uses federal stimulus money and revenues from a gas tax hike approved last year." In contrast, Missouri's "average budget for transportation projects will drop from $1.25 billion over the past five years to just $500 million in the next five. So Missouri's plan included no new construction projects....The situation in Missouri is typical. In fact, the federal stimulus package helped push many states toward focusing on simple maintenance." States' overall tax revenues rose 2.4% in the first quarter of calendar 2010 on a year-over-year basis, marking the first such gain since the third quarter of 2008, according to preliminary data the Rockefeller Institute of Government released on Thursday. Despite the overall growth in revenues, 34 of 49 "early-reporting" states still saw declines. "The increase in total collections was mostly attributable to revenue growth driven by legislated tax increases in just two states-New York and California. If those two states are removed from the calculations, total collections across the nation show a 2.2% decline in the first quarter of 2010. And even with the boost from those two states, overall revenues remain significantly below pre-recession levels. Further, early indications of revenues in the April-June quarter-marking the end of the fiscal year for 46 states-are not promising, as the important April collections from income taxes showed a 7.6% year-over-year decline." Because most state budgets are adopted during legislative sessions in the first half of the year, state-funded construction spending is likely to fall further in 2011 unless revenues turn up in the second half of 2010. The Institute for Supply Management (ISM) said today that purchasing executives in nonmanufacturing sectors reported materials prices rose in May but at a slower rate than in April. Respondents listed price increases on these items important to construction: copper, diesel fuel, drywall, lumber and wood products, steel and steel products. ISM said on Tuesday that respondents to manufacturing survey also listed aluminum and stainless steel as up in price but aluminum products as down in price; some also listed copper as down in price.- Industry Priorities
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