Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.
ABC’s analysis of Census Bureau data for January was late due to the government shutdown but shows nonresidential construction spending rose 2.4% and totaled $762.5 billion. Public sector spending dropped six-tenths of a percent while private sector spending increased four-tenths of a percent. Year-over-ear public spending rose 4.8% while private spending rose eight-tenths of percent. ABC Chief Economist Anirban Basu says 2019 will be seen as a solid year for nonresidential construction spending. While there is much discussion over federal investment spending, most of that has taken place at the state and local levels already as government finances have improved nationwide.
The value of construction put in place rose 1.3% in January, the largest rise in nine months. The Commerce Department analysis claims milder than usual January weather contributed to the put in place seasonally adjusted rate of $1.28 trillion and the biggest gain in nine months. Government project spending rose 4.9%, the largest increase since 2004, and mostly from highway and street projects.
Expansion is more likely in 2019 than contraction, according to the Wells Fargo construction industry forecast. The 43rd such report issued, the survey tallies opinions of contractors, manufacturers and equipment distributors. Their optimism quotient remains pegged at 122, a strong outlook for the year. Ninety-six percent of contractors plan to purchase new or used equipment. Ninety-two percent expect to maintain their level of equipment rental.
The Equipment Leasing and Finance Association report for January shows overall new business volume was up over 4% from 2018, and the group's monthly index continues to expand even though volume declined year over year in December. The Monthly Confidence Index for the Equipment Finance Industry remains strong for 2019 with February registering a solid 56.7, which is in positive range.
The American Rental Association five-year forecast for total North American rental revenue is expected to surpass $61.5 billion this year with steady growth through 2022. Equipment and event rental revenue is expected to grow 4.8% next year, 5% in 2021 and 4.8% in 2022 to reach $64 billion in revenue. ARA officials say that while operators anticipate another good year they remain cautious about expansion as there are some dubious areas of concern on the horizon, mainly centered around real estate interest rates.
During the recent American Rental Show, Rental Magazine Editor Jenny Lescohier had the opportunity to corral SkyJack President Brad Boehler, a leader in the lift market, to talk about problems that industry is facing.
The payfors appears to be the one remaining obstacle over a significant infrastructure bill coming out of the Congress this year. House Transportation ranking member Sam Graves is quoted as saying everything is on the table when it comes to financing the next act. The President has put a $200 billion request into his new budget for infrastructure, and the placeholders are of the opinion the Administration will await further response from lawmakers before proceeding with any additional plans. A multitude of ideas ranging from a vehicle mileage tax to increased fuel taxes has been suggested as a means of reaching the $1 trillion infrastructure plateau.
A massive mixed use development in Washington D.C. is underway, and Balfour Beatty has been selected the contractor for the project. The firm will deliver 1 million square feet of above and below ground construction at The Wharf — a $2.5 billion build in the city's southwest waterfront neighborhood. Two parking garages totaling 600,000 square feet and two office buildings of more than 300,000 square feet are included in the Balfour contract with work already underway. The entire Wharf project will add 1.2 million square feet to a half mile of the D.C. waterfront.
In closing, no inspiration is worthy until someone takes action to make it work.
This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.