Rock Products

JAN 2018

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20 • ROCK products • January 2018 www.rockproducts.com Industry Analysis sand and gravel in the third quarter of 2017 decreased in five of the nine geographic divisions compared with that sold or used in the third quarter of 2016. Production for consump- tion decreased in 23 of the 43 states for which estimates were made. The five leading states were, in descending order of produc- tion for consumption, California, Minnesota, Texas, Michigan and Washington. Their combined total production for con- sumption was 101 Mt, a slight increase compared with that of the same period of 2016 and represented 38 percent of the U.S. total. Construction Spending Construction spending during October 2017 – the most cur- rent available at press time – was estimated at a seasonally adjusted annual rate of $1,241.5 billion, 1.4 percent (±1.5 percent) above the revised September estimate of $1,224.6 billion, according to the U.S. Census Bureau. The October figure is 2.9 percent (±1.6 percent) above the October 2016 estimate of $1,206.6 billion. Highway construction was at a seasonally adjusted annual rate of $86.8 billion, 1.1 percent (±6.3 percent) above the revised September estimate of $85.9 billion. During the first 10 months of this year, construction spend- ing amounted to $1,029.6 billion, 4.1 percent (±1.2 percent) above the $988.8 billion for the same period in 2016. Spending on private construction was at a seasonally adjusted annual rate of $949.9 billion, 0.6 percent (±0.8 per- cent) above the revised September estimate of $943.8 billion. •  Residential construction was at a seasonally adjusted annual rate of $517.7 billion in October, 0.4 percent (±1.3 percent) above the revised September estimate of $515.4 billion. • Nonresidential construction was at a seasonally adjusted annual rate of $432.2 billion in October, 0.9 percent (±0.8 percent) above the revised September estimate of $428.4 billion. In October, the estimated seasonally adjusted annual rate of public construction spending was $291.6 billion, 3.9 per- cent (±2.6 percent) above the revised September estimate of $280.7 billion. Educational construction was at a seasonally adjusted annual rate of $79.0 billion, 10.9 percent (±2.5 per- cent) above the revised September estimate of $71.2 billion. "One could scarcely imagine circumstances more consistent with rapid growth in nonresidential construction spending," said Associated Builders and Contractors (ABC) Chief Econ- omist Anirban Basu. "The U.S. economy is humming, coming up on two consecutive quarters of 3 percent growth on an annualized basis. Consumers, who have been the driving force of the recovery to date, are more confident than they have been in 17 years. "Stock prices have surged, due in part to liquidity swirling around the growth," said Basu. "The worldwide economy has not been this healthy for roughly eight decades and global policymakers continue to pursue pro-growth agen- das. Interest rates remain extraordinarily low, resulting in greater demand for assets that have the capacity to generate significant income, including commercial real estate. On top of this, there are hopes in corporate America for tax reform, which would presumably accelerate economic growth and bolster corporate profitability. "In October, nonresidential construction spending rose as one might expect given broader macroeconomic dynamics. There were even signs of life in certain publicly financed cat- egories," said Basu. "It is likely that construction growth will pick up further next year due to numerous factors, including growing confidence among policymakers in rapidly expand- ing communities. That confidence should translate into more spending on public works. Of course, whether this logic pre- vails will depend in part on tax reform legislation outcomes in Congress." While overall construction spending reached a record high in October, public-sector investments in infrastructure contin- ued to lag earlier levels, according to the Associated General Contractors of America. Association officials said federal, state and local officials should address the growing shortfall in transportation, water and wastewater infrastructure in the interests of economic growth and public health and safety. "There was healthy growth this October in both public and private construction spending, with an exceptionally strong

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