July's Construction Spending Remains Virtually Unchanged
The seasonally adjusted annual rate of construction spending for July was $1,153.2 billion was practically unchanged from June’s estimate which was revised up from $1,133.5 billion to $1,153.5 billion, according to the latest Construction Spending report from the U.S. Census Bureau. May’s estimate was also revised up from $1,140.9 billion to $1,143.8 billion.
The July 2016 estimate is 1.5% higher than a year ago with the July 2015 estimate at $1,135.9 billion. During the first seven months of 2016, construction spending totaled $647.7 billion, a 5.6% increase from the same time period last year. Construction spending through July 2015 was at $613.1 billion.
The seasonally adjusted rate for private construction spending in July was $875.0 billion. This is a 1.0% increase over June’s estimate which was revised up from $851.0 billion to $866.5 billion. May’s private construction spending was also revised up from $856.6 billion to $860.3 billion.
Total private construction spending is up 4.4% from a year ago. Private nonresidential spending rose to $429.5 billion and private residential increased to $445.5 billion. The biggest increase in private construction was in office construction, $64.0 billion for July 2016, up 4.6% for the month .
“At this time, the private sector is showing more investment vitality than the public sector," said ConstructConnect's Chief Economist, Alex Carrick. "There are two subcategories of private construction that are blazing ahead, lodgings up 28.0% year-over-year and offices up 30.3% year-over-year."
"Commercial construction, which is mainly retail work, is also doing better than one might suppose given how quickly selling over the internet is expanding and the fact store closings are still grabbing the headlines," Carrick noted. "Also notable in the latest data set is a month-over-month pickup in construction spending by manufacturers, although their commitment year-over-year is down somewhat."
The seasonally adjusted annual rate of public construction spending dropped 3.1% in July to $278.2 billion. June’s estimate was revised up from $282.5 billion to 287.0 billion. May’s public construction spending estimate was revised down $284.3 billion to $283.5 billion. July’s figure is down 6.5% from July 2015. Public construction spending has been up and down the past few months.
According to Carrick, "Public spending in the highway and street category is, on balance, about even, but it is declining in sewer treatment and water supply work."