Total construction spending increased marginally in June as gains in stimulus-aided public categories offset decreases in homebuilding and private non-residential spending, the Associated General Contractors of America (AGCA) said on Monday in an analysis of new U.S. Census Bureau data.

“Stimulus dollars are supporting construction jobs but the pain is continuing for most contractors and their workers who depend on private projects or school construction,” said AGCA chief economist Ken Simonson.

Total construction spending increased by 0.1 percent in June at a seasonally adjusted annual rate, helped by a 1.5-percent increase in public construction, which offset declines of 0.8 percent in private residential spending and 0.5 percent in private non-residential spending.

“Every private category was negative, most deeply so, compared to June 2009,” Simonson said. “But there were encouraging gains for the month in private hospital and power construction, both of which should be growth markets over the next several quarters.”

Among public categories, highway and wastewater construction each rose for the fourth consecutive month, Simonson said, while other public transportation facilities—transit, rail, and airports—jumped 20 percent from a year earlier. And public housing spiked by 31 percent compared to the year-ago period.

“All of these categories have benefited from stimulus funds,” Simonson said. “In contract, public primary and secondary school construction, which has been battered by falling property tax receipts and lower in-migration to formerly fast-growing school districts, shrank 27 percent in the past year.”

AGCA CEO Stephen Sandherr urged Congress to “enact legislation to provide long-term funding for public infrastructure spending and certainty for private construction.”

“It is deplorable that the airport trust fund is now on its 14th short-term extension, the highway and transit trust fund is in danger of shutting down on Dec. 31, and there is no trust fund to sustain vitally needed water infrastructure upgrades,” Sandherr said. “Meanwhile, uncertainty over the future of major tax provisions and new financial rules are keeping investors on the sidelines, further depressing private construction.”

Posted 8/5/2010