With so much discussion currently about the need for increased state government construction spending in North Carolina, it might be useful to examine state and local government construction spending trends. March 2015 data from the Census Bureau’s Value of Construction Put in Place Survey report indicate that, nationwide, recent public sector construction has resumed the weakening trend begun during 2009. Public-sector building had begun to climb in 2014 after a long period of reduced state and local government construction spending. According to The New York Times, the Great Recession was followed by years of weak public construction despite stimulus spending that boosted federal construction projects in many areas. Spending on state and local projects actually increased during much of the recession, in part because of lags between decisions to build made in better times and actual construction. But after these projects were completed, construction activity began to slow as economic and budgetary conditions eroded across the country.
Was this the case in North Carolina? According to data from the recently released 2012 Census of Governments, North Carolina state and local governments spent $5.8 billion on construction in 2012 — ranking 15th among states. This was an 11 percent decline from 2007 before adjusting for inflation. In the region, steeper percentage declines occurred in Georgia, Florida, and South Carolina.
On a per capita basis, North Carolina state and local construction spending ranked in the bottom 10 among states in 2012 at $590 in spending for every resident compared to $870 per capita spending nationwide. To raise North Carolina’s per capita spending to the U.S. level would have required an additional $2.6 billion in state and local government construction spending in 2012.
North Carolina local government construction spending was $3 billion in 2012 — 17th among states — and fell more than 25 percent from 2007 in nominal dollars. Construction spending by the state and by localities was split evenly. This is a significant shift from 2007 when North Carolina local government construction spending accounted for nearly two-thirds of the total. Nationwide, the majority of non-federal government construction spending (62%) was by local governments. This under-representation of local government building in 2012 could be an indication of how stretched some North Carolina county and town budgets became in the aftermath of the 2007–2009 recession.