I’m like a starving smallmouth bass in a great big pond – when I see a Junebug drop into the water, I’ll swim all the way across the pond to snag that bug. So even if it’s only a small, tasty morsel, I had to latch on to the snippet of good news that June construction starts rose 3 percent from May, according to the July 16 Reed Construction Data report. I’m looking for any Junebugs I can find out there, so I’ll take it.
The 2.9 percent increase is more than the usual seasonal gain in June, according to Jim Haughey, Reed Construction Data chief economist. If you exclude residential construction, which is still in the tank, the year-to-date value of construction starts for the first six months of the year rose 13 percent from the first half of 2009.
Heavy construction starts actually fell 9 percent between May and June, according to Haughey. May was unusually strong, though, and the overall year-to-date figures show the heavy sector is up more than 16 percent from last year. Couple that with the news that the U.S. government’s stimulus spending on infrastructure is finally beginning to ramp up in year two of the program, and there’s a reason to be at least mildly hopeful. The real infrastructure projects are now coming online and we’ll see an uptick through the rest of the year. We’re nowhere close to the high-water mark of 2006, but we’re better off as an industry than we were last summer.
As with the overall economy, the health of the construction industry can be measured in jobs. The construction unemployment rate is still double that of the overall economy, but it’s showing signs of stabilizing. The stimulus will provide a temporary fix, but Congress is still stalled on the reauthorization of a long-term transportation bill and funding for clean water infrastructure and sewer rehabilitation.
There are some hopeful signs out there but I don’t see the light at the end of the Great Recession tunnel just yet – I do see a Junebug every now and then, though.
President, National Precast Concrete Association