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US construction spending reaches highest level since 2008

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World Cement,

According to an analysis by the Associated General Contractors of America, all major categories of construction spending increased in July 2014 and total construction reached its highest level since December 2008.

"It is encouraging to see signs of a broad-based recovery in private construction along with a recovery – at least for now – in public construction investment," said Ken Simonson, the Association's Chief Economist. "Private nonresidential construction should remain strong through the rest of 2014 and beyond, while residential spending is likely to keep growing, though at a more moderate pace. However, funding is still inadequate for needed public infrastructure improvements."

Construction spending in July reached US$981 billion at a seasonally adjusted annual rate, a 1.8% increase compared to the June total and an 8.2% rise compared to July 2013. Private nonresidential spending increased by 2.1% from June and by 14% from July 2013, while private residential spending grew 0.7% from the previous month and 8% compared to the same period a year earlier. Public construction spending rose 3% from June to July and 2.1% from July 2013.

Manufacturing construction rose by 4.4% and 25%, respectively. Single-family home construction improved by 0.5% and 9.4%, while multifamily spending increased by 0.2% and 41%. Highway and street construction was up 6.9% in July and 3% compared to the same period a year earlier. Public educational construction rose by 1.6% from June and 0.6% from July 2013.

"As demand for construction rebounds, many firms are finding that the pool of available workers is pretty shallow," said Stephen E. Sandherr, the Association's Chief Cxecutive Officer. "Retiring older workers, strong demand in other sectors of the economy and few younger people seeking careers in construction are combining to create workforce shortages for many construction firms."

Adapted from press release by Rosalie Starling

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