Construction put in place lost steam in May but is still ahead of 2002's pace, according to Ken Simonson, chief economist for the Associated General Contractors of America.

“Construction trends that prevailed in 2002 are persisting,” Simonson said. “Revised census totals for 2001 and 2002 show that last year private residential construction rose by 8 percent, private nonresidential fell by 13 percent and public construction of all types climbed 5 percent. So far in 2003, private residential is up 9 percent, private nonresidential has tapered off to a 10 percent decline, but public construction is only 0.6 percent of last year's pace.”

While general trends are consistent from 2002 to 2003, Simonson noted some changes in the nonresidential category. “Electric power construction rose 4 percent last year to a record,” he said. “It is down by 7 percent so far this year. Communications construction, which fell 8 percent in 2002 from its peak in 2001, has tumbled another 19 percent in the first five months of 2003. Private educational construction, which rose 1 percent last year, is down 6 percent in early 2003. On the plus side, many rates of decrease have moderated: manufacturing (-43 percent in 2002, -28 percent year-to-date); lodging (-29 percent in 2002, -11 in 2003). For the remainder of 2003, I expect the health care category to remain extremely strong, and most other private nonresidential categories to slow their declines further. But power plant construction is likely to drop even more.”

Simonson added that highway and street construction, which is only down 3 percent year-to-date, could deteriorate more because of deepening fiscal crises in many states.”

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