How State and Local Construction Dollars Are Spent

Construction of roads, schools, health-care facilities and other public infrastructure represent a major source of spending for state and local governments.

Updated data published by the U.S. Census Bureau suggests total spending on construction for both the public and private sectors has accelerated this year, with annual spending rates reaching the highest levels since early 2008. States and localities, which collectively spent an estimated $252 billion last year, are also investing more in public infrastructure this year.

Looking back further, state and local construction spending climbed significantly in the years leading up to the Great Recession. Federal Recovery Act funds then further helped support projects in 2010 and 2011. But, by late 2012, inflation-adjusted state and local spending was hovering around 10-year lows. (See chart below.)

The Census Bureau’s monthly figures -- published as annual rates -- represent how much spending occurs over a full year instead of a single month. Each monthly figure is seasonally adjusted and then multiplied by 12 for an annual rate. Data covers construction of new structures or improvements “put in place” in a given month, regardless of when contractors actually receive payments or when a project began.

Construction spending covers a broad range of various sectors of state and local government. Here are a few of the more notable trends:

Road and highway construction

Spending on highway and street infrastructure totaled more than $83 billion last year, or approximately a third of total construction spending nationally. This spending category, which includes everything from pavement to rest area facilities, is the single largest of any for which the Census Bureau reports data.

One area that’s seen significantly more investment is bridges. Data suggests a steady increase in spending dating back to early 2006.

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Education construction

Spending on education facilities makes up the next-largest segment of state and local construction costs. Primary and secondary education construction projects peaked in 2009, and they’ve since plummeted to the lowest levels since 1997. Spending for colleges and universities also took a nosedive in the aftermath of the recession, but has enjoyed strong growth over the past year.

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Corrections construction

Census estimates further suggest governments are spending less money on construction for jails and prisons. Outlays have followed a steady downward path over the past three years.

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Sports facility construction

Spending on sports facilities represents a small, but often controversial, area of public spending. Along with expensive new sports stadiums, this spending category includes smaller projects, such as outdoor courts and swimming pools (but not those for school facilities). Current spending levels are nowhere near where they were in the late 1990s and early 2000s. Data does suggest, though, that spending on sports projects has started to rebound recently.

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State and Local Government Construction Spending by Type

Select a category to view current and historical trends in construction spending for state and local governments. See the Census Bureau's website for a detailed list of definitions for each spending category.