Construction Spending Down Again

Construction spending fell for the third consecutive month in June, according to data from the Associated General Contractors of America, a construction industry trade group.

Construction spending in June totaled $1.134 trillion at a seasonally adjusted annual rate, which was 0.6 percent lower than the May total. However, spending saw a year-to-date increase of 6.2 percent for January through June.

In the housing sector, single-family spending fell 0.4 percent from May to June but rose 11 percent year-to-date while private residential spending was virtually unchanged for the second month in a row and 7.8 percent higher year-to-date. Spending on multifamily residential construction declined 1.5 percent for the month but took a 22 percent increase when measured on a year-to-date basis. Commercial construction—consisting of retail, warehouse and agriculture—declined 1.6 percent in June but climbed 8.6 percent year-to-date.

“The drop in construction spending over the past three months is probably more a reflection of the very strong gains posted early in the year than of cooling demand for construction,” said Ken Simonson, the association’s chief economist. “Nearly every major segment had first-half gains of more than five percent compared with a year ago. Contractors, surveys and the media all continue to report plenty of projects are starting or will soon.”