Construction spending figures ‘deceptively positive’
Construction spending inched up for the second straight month in April, by 0.4 percent, following downward revisions to the March spending figures, the Associated General Contractors of America reported Wednesday. April’s increase has driven private nonresidential and home-improvement spending, association officials noted. However, the gains were tempered by sluggish home building and declining levels of public investment in construction.
“Overall economic conditions seem better than they have been for several years, which normally leads to well-rounded construction growth,” said Ken Simonson, the association’s chief economist, in a release. “But these figures may be deceptively positive, masking weakening public sector demand and still-weak demand for residential construction.”
Simonson noted that the April results were boosted by a modest 0.5 percent rise in private nonresidential construction and a deceptively large 3.1 percent leap in private residential spending. However, the residential growth was attributable to a 7.6 percent jump in the “improvements” category, a number the Census Bureau frequently revises down in later months, as it did in March.
Association officials said the mixed results show the importance of enacting long-term infrastructure funding bills for transportation, wastewater and drinking water, as well as having a tax and regulatory environment that encourages private investment in structures.