August 2013

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Page 43 of 67

Industry Overview Construction Confusion Activity Moves Up, Down and With symptoms like these, prognosis for 2014 is murky. Sideways By Ken Simonson Midway through 2013, construction is displaying a split personality. Private residential construction, both single- and multifamily, is going gangbusters. Private nonresidential construction has been going nowhere. And public construction is headed in reverse. Where will these segments head for the rest of 2013 and beyond? What might drive a change in direction? Total construction spending through the first five months of the year, as measured by the Census Bureau's "value put in place" series, rose 6 percent compared with the same period in 2012, similar to the 7 percent full-year growth recorded from 2011 to 2012. But the pattern has shifted markedly. So far this year, private residential construction has surged 25 percent, after gaining 9 percent in 2012. In contrast, private nonresidential construction has flattened out to an increase of just 0.6 percent year-to-date in 2013 after rising 16 percent for all of last year. Only public construction has remained fairly consistent, shrinking 5 percent so far in 2013 following a drop of 3 percent in 2012. The Residential Revival The pickup in residential construction extends to both single- and multifamily building. The former accelerated from 22 percent growth last year to 34 percent year-to-date, while the latter rose from an already lofty 48 percent gain to 57 percent. Despite the upsurge, builders have continued to pull more permits than the number of units they have started in the first five months of 2013, suggesting the boom will continue for at least the next few months. Nevertheless, many analysts have scaled back their forecasts 42 | www.cedmag.com | Construction Equipment Distribution | August 2013 42_Simonson_Feature_KP.indd 42 7/25/13 12:49 PM

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