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Outlays Decline from Recent Peaks for Highways and Other Transportation, Water, Sewage and Conservation; Association Officials Note Bipartisan Support for Infrastructure but Say Legislation is Needed Promptly

Construction spending inched lower in October from September levels but increased from the October 2017 total, according to an analysis of new Census data by the Associated General Contractors of America. However, investment in public infrastructure posted declines from recent peaks, and association officials urged the White House and Congress to act promptly on comprehensive infrastructure legislation.

“Although most segments of construction continue to post year-over-year spending gains, investment in vitally needed infrastructure has stalled or shrunk in the past four months,” said Ken Simonson, the association’s chief economist. “If infrastructure contractors start losing employees to more-active construction segments, it may be hard to get infrastructure projects done on time once funding resumes.”

Construction spending totaled $1.309 trillion at a seasonally adjusted annual rate in October, a dip of 0.1 percent from the September rate but 4.9 percent higher than in October 2017. Private residential construction fell 0.5 percent for the month but increased 1.8 percent year-over-year. Private nonresidential spending slipped 0.3 percent from September to October but increased 6.4 percent over 12 months. Public construction spending, comprising public buildings and infrastructure, increased 0.8 percent for the month and 8.5 percent for the year.

The economist noted that public spending was boosted by large increases in educational spending and other public building segments, while all public infrastructure categories had declined from recent highs. Seasonally adjusted spending on highway and street construction peaked in August and has dropped 2.1 percent in the past two months, he said. Public investment in air, rail and water transportation facilities fell 1.2 percent between August and October. Outlays for sewage and waste disposal and water supply systems topped out in June and have decreased 2.2 percent and 8.6 percent, respectively, since then. Public spending on conservation and development, such as levees and dams, slumped 14.6 percent from August to October.

Association officials said that now is the ideal time to invest in repairing, modernizing and expanding infrastructure. Stephen E. Sandherr, the association’s chief executive officer, called on federal officials to act quickly to enact legislation that would increase funding and speed the approval process to improve highways and other modes of transportation, enhance water safety and supply, and strengthen critical levees and dams.

“Infrastructure is vital to all Americans and is a subject both parties should be able to agree on funding and improving,” Sandherr said. “The incoming Congress has an opportunity to create a bipartisan infrastructure bill that will benefit all regions and all parts of the economy.”