Construction Economics
June Construction Spending Down From May but Rises Vs. 2015
Commerce Dept. reports 0.6% monthly decline and 0.3% year-over-year uptick
Construction spending posted lackluster results for June, with volume slipping 0.6% from May’s level to a $1.134-trillion seasonally adjusted annual rate and edging up a mere 0.3% year over year, the Commerce Dept. has reported.
The report, which Commerce’s U.S. Census Bureau released on Aug. 1, also showed that construction put-in-place in the first half of 2016 climbed 6.2%, to $539.8 billion, from the same period last year.
Total June non-residential construction dipped 1% from the previous month to a $682-billion rate and was down 1.1% from June 2015.
Anirban Basu, Associated Builders and Contractors chief economist, noted that June’s year-over-year non-residential downturn was the first such monthly result for that sector in almost three years.
Residential construction was off 0.1% from May, to a $451.6-billion rate, but rose 2.4% year over year, the Census Bureau said.
Eight of the Census Bureau’s 16 non-residential construction segments showed increases in June compared with May figures, with water supply recording the largest percentage gain, 3.3%.
On the negative side of May's results, manufacturing projects fell 4.5%, commercial construction dropped 2.2%, highways and streets decreased 1.4%, and health care was off 1.1%.
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Six non-residential sectors were up from year-earlier totals, led by office construction, which jumped 16.2%, and lodging, which gained 16.1%.
Basu said in a statement, “U.S. commercial real estate has become a popular destination for foreign capital.”
Segments that declined versus June 2015 levels include sewage-waste disposal, which tumbled 14.5%, manufacturing, off 10.4%, and education, down 4.8%.
Basu said, “Corporate profits remain stagnant, and business investment remains underwhelming.”
