US construction up again in May

Construction put in place in the US for the 12 months to the end of May stood at US$ 956 billion, a +6.6% rise on a year ago according to the US Census Bureau. This was also an increase on the year-to April figure and over the course of the first five months of 2014, construction output was up +8.2% on the same period last year.

In recent months, residential construction has driven growth. however, there was a downturn in May. Private residential construction was down -1.5% from April, and the growth compared to a year ago was +7.5%, a significant slowdown on earlier in the year.

However, private non-residential construction saw an acceleration in May. The sector was up +1.1% compared to April, and +11% compared to a year ago, thanks to strength in the power, commercial, manufacturing and office construction sectors.

“The May figures show that construction activity continues to expand, but with lots of variability by month and project type,” said Ken Simonson, chief economist with the Associated General Contractors of America (AGC). “These uneven patterns seem likely to continue for the rest of the year.”

He continued, “The outlook is brightest for multifamily and oil and gas-related projects, including manufacturing. But single-family and office construction, which have done well so far, may fade later this year.”

Association officials said the increase in highway and street construction will do a U-turn if Congress and the administration fail to act soon to replenish the Federal Highway Trust Fund. It added that current estimates indicate the federal government will have difficulty reimbursing states for payments to highway contractors in July, a development that could lead to project delays and reduced construction employment.

“Stabilising the Highway Trust Fund should be lawmakers’ top priority when they return from recess early next week,” said Stephen E. Sandherr, the association’s chief executive officer. “Construction firms, their suppliers and highway users should not be held hostage to political posturing.”