Construction Spending Inches Forward in October

Total construction spending increased by 0.7 percent in October, driven largely by growing demand for power projects and public construction, the Associated General Contractors of America noted Dec. 1 in an analysis of new Census Bureau data. The new data, however, indicated continued weakness in many construction categories, including private nonresidential and single family construction, association officials observed.

?Without any upward trend in key private-sector construction components like homes and office buildings, it is hard to feel optimistic about the near future,? said Ken Simonson, the association?s chief economist. ?With public construction at risk of cutbacks, it is premature to conclude that construction has awakened from its long nightmare.?

Simonson commented that power construction increased by 8.8 percent between September and October at a seasonally adjusted rate, although the total remained 3.9 percent below the year-ago level. Public construction, aided by federal spending on stimulus, military base realignment and Gulf Coast hurricane-control projects, edged up 0.4 percent for the month and 2.2 percent year-over-year.

Private nonresidential construction, however, slumped 0.7 percent in October, leaving the total 20.7 percent below the October 2009 figure. All 11 of the Census Bureau?s private nonresidential categories were below year-ago levels, Simonson added, with only private power and transportation showing gains from September.

Private residential investment jumped 2.5 percent for the month. However, Simonson cautioned that the apparent leap is attributable to a 3.2 percent advance in new multi-family construction and a 6.2 percent rise in improvements to existing properties, whereas single-family construction sank 1.2 percent for the month.
Association officials said that a proposal released by the Deficit Commission to increase investments in highways, bridges and transit system construction provided some room for optimism. They urged Congress to embrace the transportation proposal, noting it would help the economy over the long run while giving a much-needed boost to short term construction demand.

?The best way to reduce the deficit and simultaneously support a strong and expanding economy is to invest in our aging network of highways, bridges and transit systems,? said Stephen E. Sandherr. ?Even as the broader report calls for dramatic reductions in federal spending, it is clear that our country can?t afford to neglect its infrastructure.?

Growth Opportunities Seen in Pipe Sector

Impending growth and multiple key market developments were among high notes providing positive benchmarks for the Plastics Pipe Institute Inc. (PPI) at the trade association?s semi-annual meeting held Oct. 24-27. Members received upbeat news including plans to add staff and extend programs in 2011. During sessions, reporting of highest ever web traffic, expanded media presence and newer industry applications highlighted a clear forward direction for the association. Attention also focused on ongoing research projects and key findings which were recently announced.

?Our members are feeling a new sense of optimism about business advancing that had been muted by the stagnation of the economy,? stated Tony Radoszewski, executive director of the PPI. ?They are voicing their opinions and seeing strong indicators that slow progression is being made; and their approval of PPI initiatives is helping to boost awareness about the sustainability and economical advantages of the use of plastic pipe in all its various applications.?

Donna Stoughton of Charter Plastics Inc. who serves as the chairman of the board of directors for the PPI added, ?The PPI committees, technical task forces and each of our individual members work to educate the industry and serve our cities and towns by informing them about smart, cost-effective and environmentally-conscious solutions for rehabilitating our nation?s deteriorating underground infrastructure.

?We?ve heard time and time again,? she continued, ?that more and more projects are embracing plastic pipe as the material of choice. Our PPI meetings provide a great opportunity for our members to network with each other, share success stories and look to the future for better times ahead. Especially during the recent times of trial, businesses have had it very rough. But, collectively, there is definitely great confidence that our products supply greener, smarter and better infrastructure options ? and there is no doubt that an infrastructure crisis is under way.?

Radoszewski said that while the general economic climate is still sluggish and must be carefully watched, the perspective for growth in various markets is predictable and sensible. ?There was significant discussion over the four days of our meetings about how to prepare for anticipated growth. Our divisions are increasing investments in staff support, aligning resources to manage new opportunities, and continuing educational endeavors to inform individuals about plastic pipe and its real long-term benefits of use.?

?PPI?s 2011 devotion to these goals will prove to be a tremendous resource for the pipe industry,? Stoughton said. ?We?re continuing to drive the development of PPI?s technical resources; expand PPI?s outreach and promotion of plastic pipe; and facilitate our association?s growth through programs that serve the needs of many, not just of our member companies, but for all end users.?

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