At a seasonally adjusted annual rate of $1.108 trillion, spending on construction across the U.S. hit a record in August, the most recent month for which the U.S. Commerce Department has data available. August's rate was four-tenths of a percentage point higher than this past July's revised rate of $1.104 trillion and 6.1% higher than August 2004's rate of $1.044 trillion. "The figure is especially impressive in that Hurricane Katrina disrupted some constriction late in [August 2005]," notes Ken Simonson, chief economist of the Associated General Contractors of America, Alexandria, Va.
However, Simonson is not among economists expecting a quick construction rebound along the hard-hit Gulf Coast. "There will be a lot of emergency work, such as the repairs to levees, highways and bridges, rail lines, and ports and channels that are already underway," he acknowledges. "But residential and private non-residential construction will not get going on a large scale for several months, or even years. Much of that will only substitute for new construction that would have occurred anyway and will not be a net addition," he says. "Furthermore," Simonson adds, "I expect economic activity nationwide, including construction, to grow a bit more slowly than would have been the case without the hurricanes."
