Construction spending declined between July and August to an annualized rate of $837 billion, but increased compared to August 2011, according to an analysis of new federal data released today by the Associated General Contractors of America. Association officials noted that growing demand for residential, lodging and education construction in particular offset drops in public construction spending.

Stephen E. Sandherr, the association’s chief executive officer,noted that total construction spending declined 0.6 percent for the month but was up 6.5 percent from August 2011 to August 2012. Private residential spending continues to strengthen, increasing by 0.9 percent compared to July and up 17.8 percent during the past 12 months. Private nonresidential construction, however, declined by 1.7 percent for the month, but remains up 7.2 percent for the year. Public construction slid further, declining 0.8 percent in August and 3.5 percent year-over-year.

Within the private sector, multi-family construction experienced the largest monthly and annual gains, increasing by 3.7 percent for the month and 44.8 percent for the year. Single-family construction also surged, up 2.8 percent for the month and 20.8 percent for the year. Lodging and education construction experienced the highest rate of annual growth within the private nonresidential sector, up 33.7 and 22 percent respectively, even as spending on the two segments declined by 0.1 and 0.9 percent for the month.

Power and energy construction—the largest private nonresidential type—fell for the sixth month in a row in August, by 3.7 percent compared with July, but the total still rose 12.3 percent from a year ago, thanks in part to oil and gas activity. Manufacturing construction also declined for the month, down 0.7 percent, yet remains 6.1 percent higher compared to August 2011.

Public construction continues to decline as local and state governments struggle to balance budgets and one-time federal programs like the Base Realignment and Construction (BRAC) and stimulus programs wind down, Sandherr noted. He added that highway and street construction spending inched down 0.6 percent in August but was up 3.6 percent year-over-year, while educational construction spending decreased 3.4 percent and 7.0 percent respectively.

Sandherr said construction activity was likely to stagnate until Congress and the administration can agree on spending and tax rates for next year and beyond.

Construction spending in July maintained consistent year-over-year growth despite a pullback from the June peak, according to an analysis of new federal data released today by the Associated General Contractors of America. Association officials said they expect the disparity between private and public construction to persist unless Washington acts to fix infrastructure funding challenges and pass long-delayed measures.

Ken Simonson, the association’s chief economist noted that the number send a very mixed message. Total construction spending declined 0.9 percent for the month but climbed 9.3 percent from July 2011 to July 2012 as well as for the first seven months of 2012 combined, compared with the same period in 2011. Private residential spending dropped 1.6 percent for the month but was 19 percent higher than in July 2011. Private nonresidential construction slumped 0.9 percent for the month but grew 12 percent year-over-year. Public construction slid further, edging down 0.4 percent  in July and 0.7 percent year-over-year.

The single-family segment rose for the fourth straight month, by 1.5 percent from June and 19 percent from July 2011. New multifamily construction climbed 2.8 percent in July and 45 percent from a year earlier. The only reason residential spending decreased for the month was an apparent 5.5 percent drop in improvements, but initial estimates for improvements are often substantially revised, the construction economist noted.

Power and energy construction—the largest private nonresidential type—fell for the fifth month in a row in July, by 1.4 percent compared with June, but the total still rose 21 percent from a year ago, thanks in part to oil and gas activity. Simonson said he expected demand for power and energy construction to stabilize and probably expand. He added that he was optimistic that manufacturing construction, which shrank 2.1 percent for the month but was 17 percent higher than in July 2011, will resume growing in the coming months.

Public construction, which is dominated by highway and educational construction, remains plagued by budget woes, especially for local governments and school districts, Simonson remarked. He noted that highway and street construction spending inched down 0.3 percent in July but was up 5.2 percent over 12 months, while educational construction spending decreased 0.6 percent and 5.0 percent respectively. Other public segments dipped 0.2 percent for the month and 0.8 percent year-over-year.

Association officials said public construction growth will remain a drag on the industry unless lawmakers enact long-delayed measures for essential water, wastewater and other infrastructure projects. They added that Washington officials also need to address chronic funding imbalances for a host of infrastructure programs.

Construction spending in June rose to a 2-1/2 year high as double-digit percentage increases in private residential and nonresidential construction more than offset an ongoing downturn in public construction, according to an analysis of new federal data released today by the Associated General Contractors of America. Association officials said they expect the disparity between private and public construction is likely to persist and urged policy makers to put more funding into infrastructure projects.

“The June spending gains come on top of upward revisions to May and April totals, reinforcing the notion that private construction is now growing consistently,” said Ken Simonson, the association’s chief economist. “Even more encouraging, the improvement is showing up in a wide range of residential and nonresidential categories.”

Simonson noted that total construction spending gained 0.4 percent for the month and 7.0 percent year-over-year. Private nonresidential spending climbed for the fourth consecutive month and was 14 percent higher than in June 2011. Residential construction increased 1.3 percent for the month and 12 percent year-over-year, with new multifamily construction soaring 3.4 percent and 49 percent, respectively, and single-family homebuilding up 3.0 percent and 19 percent.

The construction economist said that five of the 11 private nonresidential categories in the Census Bureau’s monthly report registered double-digit percentage gains in spending from June 2011 to June 2012: power and energy construction (including oil and gas-related projects), 26 percent; hotels, 26 percent; manufacturing and educational, 19 percent apiece; and transportation (mainly trucking and rail facilities), 17 percent. There were also 7 percent year-over-year increases in health care, commercial (retail, warehouse and farm) and office construction.

Public construction spending appears to have stabilized in recent months but the June 2012 total was 3.7 percent less than a year earlier, Simonson noted. He said only two of the Census Bureau’s 13 public categories posted year-over-year increases.

“Private nonresidential and multifamily construction should continue to grow in the second half of 2012 and beyond,” Simonson predicted. “Single-family homebuilding also should top last year’s figures, although progress may not occur every month. As a result, total construction spending in 2012 will be positive for the year for the first time since 2007 even though public construction will remain in the doldrums.”

Association officials said construction growth will remain unbalanced, however, unless lawmakers enact more funding for essential water, wastewater and other infrastructure projects.

“Although Congress has kept highway spending from falling, other types of infrastructure, including our aging water systems, need attention,” said Stephen E. Sandherr, the association’s chief executive officer. “There is nothing to be gained from letting our infrastructure deteriorate further.”