“Nonresidential construction spending continued growing in July, despite the weak economy and housing slump,” Ken Simonson, chief economist for The Associated General Contractors of America, said in early September following the release of construction spending data from the Census Bureau. He added that Congress must move fast to avert layoffs in power and highway construction.

“Although the headline figure showed a drop of 0.6 percent in total construction put in place in July, the bad news was limited to residential spending, which tumbled 2.1 percent,” Simonson said. “The report included a huge upward revision in June and May nonresidential spending, and yet the July figure was still 0.2 percent higher than the new June total.

“Year-to-date figures comparing the first seven months of 2008 and 2007 show how broad-based the nonresidential strength is,” Simonson stated, adding that total nonresidential spending through July was 14 percent ahead of the year-ago total, and 15 of the 16 Census categories-with the exception of religious structures-rose.

“The most robust category so far this year has been manufacturing, which jumped 46 percent, thanks to some massive refinery projects but also steel, cement and other plants,” he said. “That work should continue at a high level through 2009.

Power construction, such as power plants, transmission lines and wind farms, jumped by a third through July and may accelerate further in 2009 as more projects move from design and permitting into construction Simonson predicted. “However, wind turbine projects will halt soon if Congress doesn’t renew the production tax credit.”

He said another category that needs quick action from Congress is highway funding. The steep drop in gas tax receipts this year means federal highway trust fund payments to states may be delayed as early as October, Simonson warned. “If that happens, contractors will be forced to lay off workers by November.” W&C