“Growth has been steady and well distributed among the major construction segments for the past several months,” says Ken Simonson, Chief Economist for the Associated General Contractors of America. “For the first 11 months of 2005, total construction was 9 percent higher than in same months of 2004. Private residential construction grew 11 percent, public construction, 8 percent, and private nonresidential, 5 percent.
The Census Bureau revised totals for October and September up by 1 percent apiece from previous estimates.
The leading categories have been: retail, up 25 percent; manufacturing, up 23 percent; private multifamily, up 21 percent; hospitals, up 13 percent; private single-family, up 12 percent; and highways and streets, up 11 percent.
“Fast-rising materials and fuel costs have exaggerated the growth in some of these categories, especially highway construction,” Simonson says.
The cost of fuel, asphalt and plastics such as polyvinyl chloride pipe is expected to average 10 to 20 percent higher than in 2005 because of high petroleum and natural gas costs, Simonson says. Copper is expected to remain expensive and continuing spot shortages of cement should push concrete prices higher nationwide. However, steel, wood, and gypsum products should be no higher on average than in 2005 despite a lot of month-to-month volatility.
The leading construction segments in 2006 are likely to be manufacturing, health care, and lodging, Simonson says.
