U.S. construction spending highest in nearly five years

WASHINGTON - U.S. construction spending rose to its highest level in nearly five years in November as a surge in private construction projects offset a drop in public outlays.

Construction spending increased 1 percent to an annual rate of $934.4 billion, the highest level since March 2009, the Commerce Department said on Thursday. It was the eighth straight month that construction spending increased.

Economists polled by Reuters had expected a gain of 0.6 percent in November. Construction spending in October was revised to show a 0.9 percent rise instead of the previously reported 0.8 percent increase.

The report added to data ranging from employment to consumer spending that have suggested resilience in the economy even as growth is expected to step down from the third-quarter's brisk 4.1 percent annual rate.

Construction spending in November was lifted by a jump in private construction projects to their highest level since December 2008. Private construction spending rose 2.2 percent after being flat in October.

The increase reflected strong gains in spending on both residential and nonresidential projects. Private residential spending hit its highest level since June 2008 and outlays on nonresidential structures, which include factories and gas pipelines, touched an 11-month high.

Public construction spending fell 1.8 percent as both outlays on federal and state and local government projects declined.

source: interaksyon.com

Construction industry forecasts 8 pct growth this year

MANILA - The construction industry this year expects to grow eight percent or faster than the economy, with public and private sector projects seen giving the sector a boost, the Philippine Constructors Association Inc (PCA) said on Tuesday.

With “prospects both at home and abroad looking a bit better” this year, PCA said the construction industry is poised to grow faster than the 6-7 percent economic target set by the government for 2013.

“The staggering increase in public construction investments in 2012—reinforced by conducive macroeconomic conditions, government’s ability to further boost infrastructure expenditures, the growing electricity demand, and the 2013 midterm elections-related spending—will provide a blistering momentum to the construction sector in 2013,” PCA said.

“The increased growth of the private sector in real estate development supported by low interest rates will likewise contribute to the sector’s expansion,” it added.

The sustained growth of the tourism and business process outsourcing (BPO) sectors, the strong inflows of remittances from Filipinos abroad, as well as the rollout of the Aquino administration's public-private partnership (PPP) initiative are also expected to result in a construction boom.

“Increasing activities in these growth drivers would result in more civil construction works such as office buildings, roads and bridges, facilities for utilities, and the like,” PCA said.

Citing National Statistical Coordination Board (NSCB) data, PCA said the construction sector last year grew 14.4 percent or more than double the 6.6-percent growth in the country's gross domestic product (GDP) that year.

 The industry contributed P345 billion to the economy, higher than the P302 billion in 2011 and beating the P325 billion in 2010. The sector increased its share to GDP to 5.5 percent last year from 5.1 percent in 2011.

“[Last year’s] phenomenal growth was mainly caused by the upsurge in government spending on infrastructure, and sustained growth in private construction,” PCA said in its 2012 report.

Construction in 2011 declined mainly because of government under-spending amid delays in the Aquino administration's PPP program.

Last year, “[o]ne of the biggest contributors to the increased government spending is the Department of Public Works and Highways (DPWH),” PCA said.

“Since 2011, the department is committed to increase its expenditures to provide quality infrastructure facilities such as national roads, bridges, and major flood control projects. For 2013, more big-ticket infrastructure projects, including strategic tourism road projects, will be funded by the DPWH, allocating a total of P140 billion for the year—a staggering 40-percent climb from last year," the industry lobby said.

"Moreover, it is expected that public construction will continue to boost the sector in the next three years as the DPWH’s rally will be sustained to garner more than P600-billion capital outlays by the end of 2016,” PCA said.

source: interaksyon.com