Total February spending up 1%, highway segment up 9.5%
- February construction spending was up 1% from January to a seasonally adjusted annual rate of $1.3 trillion, according to the latest report from the U.S. Census Bureau. This most recent spending figure represents a 1.1% increase over the February 2018 number. Combined spending for January and February was just shy of $182 billion, 1.4% more than the first two months of 2018.
- The level of private construction spending rose 0.2% from January to a seasonally adjusted rate of $994.5 billion, but the nonresidential category fell 0.5% during that same period.
- Public construction spending increased 3.6% between January and February to a seasonally adjusted annual rate of $325.8 billion. The two public sector categories that saw the biggest month-over-month spending increases were education projects (+0.8%) and highway construction (+9.5%).
February’s spending numbers, which followed a January increase of 2.5%, were good news for the construction industry overall, as some economists, according to MarketWatch, had predicted a small decline. This year’s spending so far also represents a bit of a rebound from the relatively weaker spending figures that ended 2018.
The Associated General Contractors of America said February’s results match up to what it has been hearing from its members, which is that they have been busy since the beginning of 2019. Contractors said they expect those conditions to continue through the rest of the year.
On a year over year basis, the highway-street segment was the real performer, with spending in that category increasing almost 23% year over year.
One highway project that will keep some contractors busy this year is the ongoing $2 billion modernization of Interstate 75 in Michigan. The second phase of the program, which runs along an 8-mile stretch near Detroit, will include pavement reconstruction, an upgrade to 18 structures, drainage improvements, noise walls, and high-occupancy vehicle (HOV) lanes, which extend through to the other phases.
Phoenix's South Mountain Freeway Loop 202 is still under construction but is scheduled to be complete by the end of this year, about three years ahead of schedule. The 22-mile project was originally going to be let out in nine separate segments, but the Arizona DOT’s decision to use a public-private partnership (P3) and deliver the entire project in one phase is what is credited with driving the new schedule. According to the Fluor-led Connect 202 Partners, the project has also realized about $100 million of savings and could come in at a total of $1.7 billion.
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