Like many other economic indicators (such as GDP [3], Employment [4], and Personal Income [5]) construction spending finished the year on an upward trend as we move into 2012. Total construction spending [6] in December 2011 was $816.4 billion at a seasonally adjusted annual rate, up 1.5 percent from the revised November 2011 estimate and up 4.3 percent from December 2010. Further, construction spending grew each of the last five months in 2011.
The value of total construction spending in 2011 overall was $787.4 billion, 2.0 percent below 2010. However, the value of private construction in 2011 was $504.1 billion, 0.7 percent greater than the $500.6 billion spent in 2010. While this is a preliminary estimate [6], it represents a sharp contrast to the annual declines of 12.1% in 2008, 22.5% in 2009, and 14.9% in 2010. What’s holding construction down? State and local spending on construction fell 6.6% in 2011, reflecting continued budget woes. Continued state and local decreased spending is also demonstrated in our post about employment for the year [7], where private employment increased by 1.9 million in 2011 whereas government employment fell by 280,000.
~Mark Doms, Chief Economist, U.S. Department of Commerce
February 1, 2012
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