Construction spending was up 12 per cent compared to June of previous year.
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Nonresidential construction spending totaled $686.9 billion on a seasonlly adjusted annualized basis for the month.
Construction is expected to provide support for the overall economy this year, led by gains in housing activity. Transportation, sewage, and highway construction spending, among other areas, have increased this year as well. Basu added that the results also are “further proof of the recovery for nonresidential construction”.
The modest uptick in total construction spending partly reflected a jump in spending on public construction, which surged up by 1.6% to an annual rate of USD298.2 billion.
“Exactly half of the 16 nonresidential construction sectors experienced growth in June”, said Basu. Those measures, which include expanding career and technical education opportunities, making it easier for firms to establish regional training programs and immigration reform, are designed to make it easier to recruit and prepare new construction workers. Spending on nonresidential structures has been undermined by investment cutbacks in the energy sector in response to the tumble in crude oil prices. Even with the June slowdown, construction spending advanced to a seasonally adjusted annual rate of $1.06 trillion, the best pace in seven years. 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. The June increase fell short of the consensus 0.6% bump forecast by economists surveyed ahead of the release by Bloomberg Bloomberg. Educational construction was at a seasonally adjusted annual rate of $67.2 billion, 0.2 percent (±5.1 percent) above the revised May estimate of $67.1 billion.
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Office-related construction spending fell 1.1 percent in June, but is up 24.4 percent from the same time one year ago.
