U,S. construction fell in April by the largest amount in a year, reflecting weakness in homebuilding, non-residential construction and government projects.
The Commerce Department reported Thursday that construction spending fell 1.4 percent in April, the biggest drop since a 2.9 percent fall in April of last year. The decline left spending at a seasonally adjusted annual rate of $1.22 trillion.
Construction activity has been one of the bright spots for the economy over the past year, and the big decline in April is expected to be temporary. Analysts are forecasting that construction will provide continued fuel for the economy in the coming year.
"On the face of it, this is a terrible start to the second quarter, but these data are subject to huge revisions," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "We're expecting either a clear rebound in May or upward revisions to April, as the trend in spending is upwards." The April result followed a revised 1.1 percent increase in March, which had pushed construction spending to a record high of $1.24 trillion.
Residential construction slipped 0.7 percent, the biggest drop since a 1.1 percent decline in September of 2016. The Commerce Department reported two weeks ago that new home construction was down 2.6 percent in April, but analysts blamed much of that weakness on temporary factors.
Non-residential construction dropped 0.6 percent in April, the third straight monthly decline. While spending on office construction was up for the month, spending on hotels and motels and the category that includes shopping centers fell. Spending on construction of factories was also down a sharp 1.9 percent and down 8.4 percent from a year ago.
Government construction activity was also down 3.7 percent, the biggest drop since July of 2016. State and local construction, the biggest part of the government spending category, fell 3.5 percent, while spending on federal projects was down 5.7 percent.
President Donald Trump sent Congress a budget last month which proposed spending $200 billion over the next decade to support repairing the country's aging roads, bridges and other infrastructure. The administration said it would put forward a plan that would leverage the money with state, local and private support for a combined effort of $1 trillion over the next 10 years
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By taking up the issue of highway tolls late in the session and linking it to the state’s desperate need for revenue, the House Democratic majority has muddied a complex public-policy debate over how Connecticut might maintain crumbling infrastructure as its Special Transportation Fund staggers towards insolvency.
The House adjourned for a second consecutive day Thursday without an expected vote on a bill authorizing the Department of Transportation to implement a system of electronic tolls, a concession to the difficulty of tackling major controversial issues without bipartisan support in a closely divided General Assembly.
Transportation Commissioner James P. Redeker and his chief of policy and planning, Thomas J. Maziarz, spent an hour briefing House Republicans on changing federal policy that allows the state to establish tolls on interstate highways as part of a pilot program to provide much-needed funding for infrastructure and to test how congestion pricing can change driving habits.
Their explanation of how tolls could be implemented did not overcome the GOP’s objections to a plan by Democrats to effectively borrow against the new revenue stream to help close a budget gap — even if the first toll might not be collected for another three or four years.
“Once again, we’re not going to put our finger on that murder weapon,” House Minority Leader Themis Klarides, R-Derby, colorfully told reporters. “That’s what this is about guys. This is about more revenue grabs when we don’t even have any specificity on any of this stuff, right?”
Facing a constitutional adjournment deadline of midnight Wednesday, legislators are considering several major issues with hundreds of millions of dollars at stake, including whether to rewrite the rules for energy procurement to enhance the profitability of the Millstone nuclear power station or to license the first casino off tribal lands.
Legislative leaders already have given up on crafting a budget by the regular-session adjournment deadline of midnight Wednesday for the fiscal year that begins July 1. The toll debate is a preview of how difficult it will be to pass a budget without GOP votes.
Klarides said only one of her members, “at most,” appeared ready to vote for tolls. House Democrats, who hold a 79-72 majority, cannot find the 76 votes necessary for passage among their members. Should they somehow manage the find the votes, the bill still would have to clear the evenly divided Senate.
House Speaker Joe Aresimowicz, D-Berlin, who had hoped to open a debate on tolls Thursday afternoon, instead adjourned for the day shortly before 4 p.m., stunning legislators prepared to work late into the night as they rush to clear the calendar before adjournment. CLICK TITLE TO CONTINUE