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CONSTRUCTION SPENDING SUFFERS 'DISAPPOINTING SETBACK,' ACCORDING TO ASSOCIATED BUILDERS AND CONTRACTORS

 CONSTRUCTION SPENDING SUFFERS 'DISAPPOINTING SETBACK,'
 ACCORDING TO ASSOCIATED BUILDERS AND CONTRACTORS
 WASHINGTON, April 1 /PRNewswire/ -- Associated Builders and Contractors said the announcement today by the Commerce Department that construction spending had declined in February was a "disappointing setback," after it had posted an increase in January -- the first in three months.
 John Wells, senior economist for ABC, said overall the construction industry "will be unable to post anything more than a moderate recovery in 1992." He said long-term growth is still restricted by the credit crunch and the overbuilding in the commercial office building sector.
 Wells said the contractors continue "to downsize their operations, scale back their work force and look to smaller sized markets to survive."
 Wells said the 0.4 percent decline, while lower than the 1 percent increase anticipated by most forecasters, is somewhat misleading since most of the declines were in markets -- multi- residential housing and commercial construction -- which are still a couple of years away from showing any real signs of stability.
 "There are some bright spots: public construction, particularly highways and streets, which posted an 8 percent increase, continue to show signs of improvement." Wells credits the growth in infrastructure construction to the Intermodal Surface Transportation Efficiency Act of 1991. ABC played an active role in getting the act approved by Congress last December.
 Wells said that spending for institutional construction, which includes hospitals and educational facilities -- while relatively flat for February -- "represents one of the few remaining markets which point toward stable, long-term growth."
 -0- 4/1/92
 /CONTACT: Dick Haas or Mike Henderson of the Associated Builders and Contractors, 202-637-8800/ CO: Associated Builders and Contractors, Inc. ST: District of Columbia IN: CST SU:


DC -- DC028 -- 4064 04/01/92 16:51 EST
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Publication:PR Newswire
Date:Apr 1, 1992
Words:290
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