Construction Spending Hits 11-Year Low

Construction spending fell for the sixth straight month in May, touching an 11-year low, as shrinking public outlays and residential construction swamped a rise in private nonresidential work, the Associated General Contractors of America reported in an analysis of new Census Bureau data. The construction trade association?s chief economist, Ken Simonson, predicted spending patterns would continue to be uneven.
?Despite a few bright spots ? power, manufacturing and warehousing and distribution facilities ? most construction is stuck in neutral at best or is shrinking,? Simonson said. ?Five years removed from the peak in spending and jobs, the industry still faces a long road to recovery.?

Simonson pointed out that public construction spending has skidded 12 percent in the past eight months as state and local budget cuts have outweighed federal spending on stimulus and military base realignment projects. Meanwhile, the widely reported upturn in private apartment activity has yet to show up in the Census numbers.

Simonson noted that total construction spending declined 0.6 percent from April to May at a seasonally adjusted annual rate, putting the May rate at $753 billion, down 7.1 percent from a year ago and down 38 percent from the record high in March 2006. Private nonresidential spending increased 1.2 percent from April to May but fell 5.1 percent compared with the May 2010 level. Private residential spending was off 2.1 percent for the month and 6.6 percent year-over-year. Public spending dropped 0.8 percent and 9.3 percent, respectively.

The private nonresidential gains were concentrated in power construction ? emissions control upgrades to coal-fired plants, renewable power installations, transmission lines, and oil and gas distribution ? which jumped 4.4 percent in May and 11.5 percent from a year earlier, Simonson observed. Private transportation investments, such as trucking and air freight facilities, rose 4.5 percent for the month and 3.7 percent over 12 months. Manufacturing construction climbed 1.8 percent in May but was down 19.6 percent since May 2010.
Simonson commented that the largest residential category is currently improvements to existing single- and multifamily properties. These expenditures fell 3.8 percent for the month and 1.0 percent year-over-year, he said. New single-family construction sank 0.3 percent and 11.9 percent respectively, while new multi-family construction dropped 2.1 percent and 6.8 percent.

The two biggest public categories ? highways and educational construction, which make up more than half of the public total ? both contracted sharply in May, Simonson pointed out. Highway construction fell 1.5 percent for the month and 11.3 percent year-over-year, while education spending dropped 2.3 percent and 8.7 percent.

?Looking ahead, expect to see continued strength in power, manufacturing and distribution projects, along with a pickup in market-rate apartment construction,? Simonson concluded. ?But declining public spending is likely to keep overall gains modest at best.?

St. Louis MSD Agrees to $4.7 Billion Sewer Plan

The St. Louis Metropolitan Sewer District, the U.S. Environmental Protection Agency and the Missouri Coalition for the Environment have agreed to a 23-year, $4.7 billion plan to stop sewer overflows and comply with the federal Clean Water Act, according to news reports. The parties have been in negotiations since EPA and the State originally filed suit in 2007.

Under terms of the agreement, MSD must significantly reduce the amount of flows in its combined sewer area, which comprises the downtown area and older suburbs and eliminate all illegal sanitary sewer bypasses by Dec. 31, 2033, including 50 of the 200 bypasses in the system by the end of this year.
In all, MSD operates 4,741 miles of sanitary sewers and 1,928 miles of combined sewers. Sewer bills are expected to increase significantly, potentially doubling ? or more ? from the current average of less than $30 per month. ?

Kopocis Tapped for EPA Post

President Barack Obama announced his intent to nominate Ken Kopocis as Assistant Administrator for the Office of Water, Environmental Protection Agency. Obama said, ?I am honored that these talented individuals have decided to join this Administration and serve our country. I look forward to working with them in the months and years to come.?

Ken Kopocis has been the senior counsel on the House Committee on Transportation and Infrastructure since 2008. From 2006-2008, he served as the deputy staff director for Infrastructure on the Senate Committee on Environment and Public Works. From 1993-2006, Kopocis was the staff director and senior counsel for the House Subcommittee on Water Resources and Environment for the Committee on Transportation and Infrastructure. From 1985-1993, he served as Assistant Counsel on the House Subcommittee on Water Resources and Environment for the Committee on Public Works and Transportation.

Kopocis has worked on water issues in the United States Congress for over 25 years, and has played a role in crafting and defending numerous pieces of environmental legislation, including the Clean Water Act. He also previously served as an Attorney in the Government Accountability Office and at the General Services Administration. Kopocis holds a B.S. from the University of Nebraska-Omaha and a J.D. from the College of William and Mary.

If confirmed, Kopocis will replace Nancy Stoner who has been acting Assistant Administrator since Peter Silva stepped down earlier in the year.

Wyoming Town Recognized for Wind Turbines at Water Facilities

The U.S. Environmental Protection Agency recently presented awards to the Town of Medicine Bow, Wyo., for the innovative use of green energy in its water and wastewater treatment operations. Diane Sanelli, director of EPA?s state revolving fund program in Denver, presented Mayor Kevin Colman a Clean Water State Revolving Fund (CWSRF) award and a Drinking Water State Revolving Fund (DWSRF) award.
In 2010, the Town of Medicine Bow received a $64,908 CWSRF loan and a $51,896 DWSRF loan from the Wyoming State Lands and Investments Office and the Wyoming Department of Environmental Quality to install nine wind turbines at its sewage and drinking water facilities. Each loan was funded by the American Recovery and Reinvestment Act and was subsidized through 100 percent principal forgiveness via the Recovery Act?s Green Project Reserve.

Leave a Reply

Your email address will not be published. Required fields are marked *

*