The Associated General Contractors of America last week commented on the value of construction put in place, which soared in December to an 11th consecutive record $1.03 trillion at a seasonally adjusted annual rate, as reported by the Census Bureau. The preliminary full-year total for 2004 was $998 billion, a nine-percent increase from 2003.
"These numbers mark a real turnaround for nonresidential construction and show good acceleration at yearend," said Kenneth Simonson, chief economist for AGC. "After falling for three years, private nonresidential construction wound up four-percent higher than in the previous year, with December's total a solid six percent higher than in December 2003. Public construction was three-percent higher for the full year and nine percent ahead in December."
Simonson noted that part of the gain was because of steep price increases for many construction materials. "In 2005, I expect prices to rise less dramatically, and for more construction categories to keep expanding in inflation-adjusted terms. However, it is essential that Congress approve an adequate level of highway spending on a long-term basis, or this important sector will slip badly by 2006. It's especially encouraging to see how many separate categories wound up in the plus column for the year," Simonson added. "The lodging sector, which has strengthened all year, jumped 19 percent from 2003 to 2004. Health care construction was almost 10-percent higher. Categories that I'd rank as pleasant surprises include office and commercial construction, which both rose six percent, and manufacturing, which ended the year 2 percent higher after lagging nearly every month. And both major public categories, education and highways and streets, finished four percent ahead of 2003."
