Construction Spending Down Slightly

Construction spending during May 2016 reached a seasonally adjusted annual rate of $1,143.3 billion, 0.8 percent below the revised April estimate of $1,152.4 billion, but 2.8 percent above the May 2015 estimate of $1,112.2 billion, according to data from the U.S. Census Bureau. Construction spending in the first five months of this year, construction totaled $438.5 billion, which is 8.2 percent higher than the $405.4 billion for the same period in 2015.

Spending on private construction in May was at a seasonally adjusted annual rate of $859.3 billion, a 0.3 percent drop from April’s revised estimate of $861.9 billion. Residential construction was at a seasonally adjusted annual rate of $451.9 billion in May, virtually unchanged from the revised April estimate of $451.7 billion, while nonresidential construction was at a seasonally adjusted annual rate of $407.4 billion in May, a 0.7 percent dip from the revised April estimate of $410.1 billion. The estimated seasonally adjusted annual rate of public construction spending was $284.0 billion, 2.3 percent under the revised April estimate of $290.5 billion.

Ken Simonson, chief economist at Associated General Contractors of America, a construction industry trade group, noted that the latest data affirms complaints that contractors are having an increasingly hard time finding qualified workers to hire.

“Mild winter weather in many regions early in 2016, followed by extreme rains in some locations in May, has probably distorted monthly spending patterns but shouldn’t mask the robust widespread growth in demand for construction so far this year,” said Simonson. “It appears there will be plenty of activity in the remainder of 2016—if contractors can find the workers they need.”