Stimulus Funding Increases Construction Spending in March

May 12, 2010
Increases in public-sector construction spending, driven by stimulus funds, helped boost total construction activity by almost $2 billion between February and March, according to an analysis of federal spending figures by Arlington, Va.-based Associated General Contractors of America

Increases in public-sector construction spending, driven by stimulus funds, helped boost total construction activity by almost $2 billion between February and March, according to an analysis of federal spending figures by Arlington, Va.-based Associated General Contractors of America. The figures show that the stimulus has gone from slowing declines in construction spending to contributing to increases, the association notes.

"If it weren’t for public investments in infrastructure and construction, this industry would be in free fall," says Ken Simonson, the association's chief economist. "Fortunately, the stimulus is now helping rebuild a construction industry devastated by relentless declines in private-sector activity."

Simonson notes that the new Census Bureau figures show construction spending at an annualized rate of $847.3 billion, an increase of 0.2% from $845.5 in February. While private-sector construction spending still dominates the market, it declined 0.9% between February and March, from $555.7 to $550.8 billion. The largest declines came in communications (12.1%), lodging (4.6%) and power (3.8%) construction.

Public-sector construction, meanwhile, increased 2.3% from $289.9 to $296.5 billion during the same timeframe. The largest increases came in publicly-funded power (23.7%), transportation (12.4%) and water supply (5.9%) construction. Simonson notes that these areas and others showing increases received significant funding from last year's stimulus law.

Association officials caution that the increases in construction spending were unlikely to last once the stimulus runs its course. They note that high office and retail vacancy rates, as well as underutilized manufacturing capacity, indicate private-sector construction will continue to decline through at least the end of the year. They add that cash-strapped state and local governments won't be able to broadly increase capital programs until at least 2012.

"With no transportation bill, no aviation legislation, and no water trust fund, the only thing waiting for this industry after the stimulus is a funding cliff," says Stephen Sandherr, the association's chief executive officer. "If things don’t change soon, all the stimulus will have been was a really expensive way to delay hardships and layoffs for thousands of construction workers."

Voice your opinion!

To join the conversation, and become an exclusive member of EC&M, create an account today!

Sponsored Recommendations

Electrical Conduit Comparison Chart

CHAMPION FIBERGLASS electrical conduit is a lightweight, durable option that provides lasting savings when compared to other materials. Compare electrical conduit types including...

Fiberglass Electrical Conduit Chemical Resistance Chart

This information is provided solely as a guide since it is impossible to anticipate all individual site conditions. For specific applications which are not covered in this guide...

Considerations for Direct Burial Conduit

Installation type plays a key role in the type of conduit selected for electrical systems in industrial construction projects. Above ground, below ground, direct buried, encased...

How to Calculate Labor Costs

Most important to accurately estimating labor costs is knowing the approximate hours required for project completion. Learn how to calculate electrical labor cost.