What's Happening in Construction: July Edition

Industry Insights Comments

CAT 980F wheel loader

Mixed news for the construction industry

June brought mixed news for the construction industry with a number of positive trends continuing but a recovery for 2013 still looking doubtful according to economists.

Construction activity in the US for the 12-months ending in May was up 7% from a year ago to US $830 billion – the highest level since December 2009. Growth was driven by increases in privately funded construction and the private non-residential sector while publicly funded construction was down 3.9% from a year ago1.

Machinery sales up in June but job growth slowing

North America machinery sales other than utility-type vehicles continued their upward trend with growth from rental fleets replacing machines and demand for new vehicles in energy-related businesses offsetting weakness in public infrastructure projects2.

Despite the positive trends the outlook for a recovery in 2013 remains doubtful and decision-makers have adopted a wait-and-see attitude. Job growth too is decelerating with Europe’s continuing financial woes and questions about future federal spending contributing to the uncertainty3.

On the positive side, economists expect health care and power generation related construction to experience job growth over the coming months.

US highway bill becomes law

Public transportation infrastructure gets a boost with the signing of the US highway bill that authorizes US $40 billion and US $41 billion in highway infrastructure investments in 2013 and 2014 respectively.

Approximately US $37 billion of the funding will be designated to federal transportation projects annually and money spent by the AED member companies is expected to generate US $23 billion in activity for the broader US economy4.

North America highlights

  • North America construction machinery sales have advanced 11% from 64,000 to 70,975 units since the start of the year2
  • US construction activity at the end of May stood at US $830 billion, up 0.9% from April5
  • US privately funded construction grew 13.3% from a year ago1
  • US private non-residential sector construction grew 18.6% from a year ago1
  • US publicly funded construction declined 3.9% from a year ago with a drop in the residential sector 1
  • US engine maker Cummins cut Q2 revenue outlook by US $500 million citing weak US truck orders6
  • 2,000 trucking jobs added in June; payroll still 7.6% below 2007 peak7
  • Domestic revenue for top 400 contractors rose 5.9% in 2011 to US $220 billion8

Europe highlights

  • Eurozone construction industry employment fell 3.5% over last year9
  • Eurozone construction output up 1.4% over last year to €1208 billion9
  • Eurozone civil engineering output up 0.7% over last year, tempered by cuts in public spending9
  • New home building driving tentative construction recovery10
  • UK heavy equipment sales down while light product manufacturers report increased sales11

Latin America highlights

  • Stable growth expected in Latin America led by investments in transport and energy infrastructure12

Sources:

  1. http://www.khl.com/magazines/international-construction/detail/item76317/
  2. http://www.starks-news.com/TheLedger/TheLedger.htm
  3. http://www.aednet.org/aednews/index_full_story.cfm?id=10928519
  4. http://www.aednet.org/aednews/index_full_story.cfm?id=10928566
  5. http://www.reuters.com/article/2012/07/02/us-usa-economy-construction-idUSBRE8610QO20120702
  6. http://www.industryweek.com/global-economy/cummins-cuts-outlook-fueling-talk-global-economic-slowdown
  7. http://www.joc.com/labor/few-trucking-jobs-added-june
  8. http://enr.construction.com/toplists/contractors/001-100.asp
  9. http://www.khl.com/magazines/international-construction/detail/item76439/New-house-building-lifted-Europe-in-2011/
  10. http://www.khl.com/magazines/international-construction/detail/item76439/
  11. http://www.khl.com/magazines/construction-europe/detail/item76377/Mixed-UK-market-outlook/
  12. http://www.khl.com/magazines/international-construction/detail/item76236/
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2 comments

maico
maico on August 17, 2012 said
Reading the report sure don't look like whats going on in oregon, especially southern Or. Very slow here.
Robert Cifarelli

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