June Construction Spending Up 12 Percent Year-over-year

When spending on residential construction is included, the year-over-year gains are the highest since 2006, according to a separate report by The Associated General Contractors of America.

“Exactly half of the 16 nonresidential construction sectors experienced growth in June”, said Basu. He noted that the year-over-year growth rate was the strongest since March 2014, indicating a faster pace of construction spending overall.

Read the Census release. But on a monthly basis, the gain was the smallest in five months.

The report said construction spending inched up by 0.1% to an annual rate of USD1.065 trillion in June from the revised May estimate of USD1.064 trillion. Basu added that the results also are “further proof of the recovery for nonresidential construction”. Because the power sector accounts for a large portion of construction spending, a decline in that sector dragged the whole industry down. Spending on nonresidential structures has been undermined by investment cutbacks in the energy sector in response to the tumble in crude oil prices.

Spending in the water supply category expanded 12.2 percent from May and is up 12 percent on an annual basis. The gross domestic product expanded at an annual rate of 2.3 percent, up from growth of just 0.6 percent in the first quarter. Spending on government building projects was up 1.6 percent as a solid increase at the state and local levels offset a drop in federal projects.

Public construction outlays jumped advanced 1.6 per cent to their highest level since November 2010. This total was 8 percent above the $446.8 billion worth of construction spending for the same period in 2014.

For June, private construction slipped 0.5% from May’s totals but rose 13.7% from its year-earlier total. Economists had expected spending to climb by 0.6 percent.

Manufacturing-related construction spending fell 0.8% in June, but is up 62.1% compared to June 2014.

Religious spending fell 6.2 percent for the month, but is up 5 percent from the same time a year ago.