June Construction Spending Increases
According to figures, overall U.S. construction spending grew by 0.4 percent in June to a seasonally adjusted annual rate of $842.1 billion. While the growth was slightly weaker than the 0.5 percent growth predicted by many economists, it comes atop revised figures that showed already strong growth in May and April, growing by even more than previously reported.
May construction spending was revised to show 1.6 percent growth, notably higher than the 0.9 percent increase initially reported. April’s figures were revised up to show 0.9 percent growth from 0.6 percent.
According to the report, strong growth in the private sector drove the overall increase in construction spending in June, while slight growth in state and local government construction spending offset a 1.6 percent decline in federal construction spending. This left public construction roughly unchanged.
The private sector saw a 0.7 percent increase in construction spending, although the growth was slower than the 2.1 percent increase posted in May and the 1.4 percent growth in April. The report indicated that the increase in private construction in June was driven by 1.3 percent growth in private residential construction spending.
As with the broader private sector figures, private residential construction spending did not reach the even larger 3.1 percent growth posted in May or the 1.9 percent growth for April.
Private non-residential construction, which had posted increases of 1 percent or larger each month from March to May, continued to grow but at a much slower 0.1 percent rate.
In raw dollar terms, overall construction spending, private construction spending and private non-residential construction all reached the highest levels since late 2009.
Private residential construction spending, in raw dollar terms, reached the highest level since January 2009, according to Commerce Department figures.
Of the relatively stagnant public sector construction spending posted for June, educational construction spending fell 1.4 percent, while highway construction spending rose by 1.5 percent.
Publication date: 8/27/2012