Construction Spending: Declines Moderately

August 1, 2016
Bottom Line: Construction fell moderately in June compared to market expectations for a moderate gain. Homebuilding was unchanged and the year-over-year growth has slowed in recent months. Meanwhile, non-residential construction fell and is now rising only modestly year-over-year. Finally, public construction fell and is moderately below its year ago levels. Overall, construction spending is now growing only slightly on a year-over year basis and the pace of increase has slowed sharply in the past 3 months. Construction Spending FELL by 0.6% in June, compared with market expectations for an increase of 0.5%. The May estimate was revised modestly higher from -0.8% to -0.1%, while the April, estimate was revised modestly lower from -2.0% to -2.9%. Construction spending is now 0.3% ABOVE its year ago level but still 5.9% below its March 2006 peak. Residential Construction was UNCHANGED. Homebuilding has been on a slowly improving trend and is now 2.6% ABOVE its year ago level. Nonresidential Construction FELL by 1.3%. Nonresidential construction year-over-year growth has been improving and is now 2.5% ABOVE its year ago level. Public Construction FELL by 0.6% and is now 6.0% BELOW its year ago level. Public construction had been on a increasing trend since March 2014 but is now declining moderately for the past 3 months.
Article by contingentmacro