Several key indicators suggest continued growth in residential
housing construction, but relative uncertainty in
nonresidential and public construction wont help
steelmakers as they await an improved building market.
Kenneth D. Simonson,
chief economist of the Associated General Contractors of
America (AGC), forecasts growth of 6 to 10 percent in overall
construction spending next year compared with this year, but
with weaker figures in public spending and nonresidential
continued decline in government funding. Construction has been
feeling the pain of sequestrations ever since Oct. 1 of last
year," he said in a webinar this month. "Federal spending has
declined for 2 years in a row. ... As a result, were
seeing a lot less federal money going into construction."
"On a year-over-year
basis, public construction has continued its long decline,
private nonresidential spending is mixed, and only home and
apartment construction is booming," Simonson said in a
employment rose to more than 5.8 million in September, up 3.4
percent both month on month and year on year, according to the
AGC. Employment also climbed in residential and nonresidential
construction, both sequentially and vs. September 2012.
Billings Index (ABI) showed positive trends for September as
well, with its score rising to 54.3 from 53.8 in August. Any
number above 50 indicating positive growth.
The strongest growth
was in the West, at 60.6; and the South, at 54.1. The Midwest
and Northeast were the weakest regions, at 51 and 50.7,
"The ABI has been
sending a more positive signalits been up in all
specialties for close to a year," Simonson said. "Its
certainly a very strong sign, but its hard to translate a
yes billings were higher to a percentage change in
continues to be weak as the sequester hits construction
activity and slows federal construction programs.
construction rose 16 percent in 2012 compared with 2011, but is
likely to slow to 4 to 7 percent by the end of this year vs.
last year, Simonson said. It is forecast to increase 1 to 10
percent next year, while public construction is likely to
decline 1 to 5 percent.