The Associated Builders and Contractors report year-over-year, total nonresidential construction spending is up 5.4 percent based on statistics from the U.S. Census Bureau. Total nonresidential construction was virtually unchanged for the month of June as spending remained at a seasonally adjusted annual rate of $570 billion.
Private nonresidential construction spending was up 0.1 percent for the month and is up 14 percent year-over-year. Public nonresidential construction spending was unchanged for the month and is down 3.7 percent from June 2011.
“Nonresidential construction spending in June was roughly in accordance with expectations,” said ABC Chief Economist Anirban Basu. “The volume of spending was virtually unchanged for the month, reflecting an economy that is growing slowly, but with an insufficient level of confidence to produce significant numbers of new construction starts.
“However, this does not suggest that the latest reports regarding construction spending were negative,” Basu said. “Nine of sixteen subsectors registered growth for the month, including highly cyclical segments like lodging and manufacturing.”
The largest subsection posting increases for the month included communication, up 4.3 percent; lodging, up 3.7 percent; manufacturing, up 3.7 percent; and transportation, up 2.6 percent. Eight subsectors posted increases from one year ago, including lodging, up 23.3 percent; manufacturing, up 19.3 percent; and power, up 19.2 percent.
Seven subsectors saw decreases in spending for the month including water supply, down 4.5 percent; conservation and development, down 4 percent; power, down 3.1 percent; and commercial construction, down 1.9 percent. Since June 2011, construction spending decreased in eight subsectors, including conservation and development, down 18.2 percent; religious, down 5.2 percent; water supply, down 4.2 percent; and amusement and recreation, down 2.3 percent.
Residential construction spending was up 1.3 percent for the month and is 10.7 percent higher than the time last year. Overall, total construction spending – which includes both nonresidential and residential – was up 0.4 percent for the month and 7 percent from June 2011.
“A variety of leading indicators pertaining directly to the construction industry suggest a flat level of spending going forward,” said Basu. “ABC’s Construction Backlog Indicator suggests the industry is not positioned for a surge in construction activity any time soon.” Read More.