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Public construction spending: Building up U.S. infrastructure

The FRED Blog has used U.S. Census data to compare private construction spending across different types of structures. Today we build on that topic by comparing the different types of public construction spending.

The FRED graph above shows spending data between 1993 and 2020. During most of these years, local, state, and federal construction projects amounted to one out of every four dollars spent on construction. As of 2020, public construction spending was $361 billion. Let’s look at the specific building blocks.

Over the past 20 years, almost all public construction spending has been directed to nonresidential projects, including new structures and improvements on existing ones. The Census reports on 12 categories of nonresidential spending. Of those, 4 categories comprise about three quarters of total expenditures. In descending order:

  • Highway and Street, ranging from interstate highways to neighborhood sidewalks
  • Educational, including schools, museums, and libraries
  • Transportation, comprising airports, ports, and mass transit facilities
  • Sewage and Waste Disposal, ranging from pipes to treatment plants

Our second FRED graph shows the proportional size, recorded between 2002 and 2020 (when annual data are available), of these four categories of construction projects. There’s a noticeable point of inflection after 2009, when the share of public construction spending on highways and streets and transportation grew. The share of spending on educational structures, however, continued to decrease. And the share of construction of sewers and waste disposal facilities remained constant. These changes reflect shifting spending priorities as well as the aging of both the population and the physical infrastructure that supports the daily business of life.

How these graphs were created: Search for and select “Total Private Construction Spending: Total Construction in the United States.” From the “Edit Graph” panel, use the “Add Line” tab to search for “Total Public Construction Spending: Total Construction in the United States.” Click “Add data series.” Use the “Format” tab to change the graph type to “Area” and the stacking to “Percent.” In the same tab, select area colors to taste.
For the second graph, search for and select “Total Public Construction Spending: Highway and Street in the United States.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Total Public Construction Spending: Nonresidential in the United States.” Next, create a custom formula to combine the series by typing in “a/b” and clicking “Apply.” Use the “Add Line” tab and repeat the customization step to add the other three lines to the graph. To change the line colors and mark types, use the choices in the “Format” tab.

Suggested by Diego Mendez-Carbajo.

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