U.S. Construction Spending Declines for the Second Straight Month in July
Summary
- Total July construction -0.4% m/m (+8.5% y/y); June and May revised up.
- Residential private construction drops 1.5% m/m (+14.1% y/y), the largest monthly decline since April '20, led by m/m drops of 4.0% in single-family building and 0.6% in multi-family building.
- Nonresidential private construction increases 0.4% m/m (3.1% y/y), up for the third straight month.
- Public sector construction rises 1.5% m/m (3.3% y/y), up for the sixth time in seven months, led by a 1.5% gain (3.3% y/y) in nonresidential public construction.
The value of construction put in place fell 0.4% m/m (+8.5% y/y) in July after upward revisions to a 0.5% decline in June (-1.1% initially) and a 0.7% gain in May (+0.1% previously), according to the U.S. Census Bureau. The July result was the second consecutive monthly decline following eight straight m/m increases. No change in construction spending (0.0% m/m) for July had been expected in the Action Economics Forecast Survey.
Private construction decreased 0.8% (+9.9% y/y) in July following an upwardly revised 0.7% June decline (-1.3% initially) and eight successive m/m gains. Residential private construction slid 1.5% (+14.1% y/y), the second consecutive m/m slide and the deepest since April 2020, after a 1.1% June drop (-1.6% initially). Single-family building fell 4.0% (+2.9% y/y), the largest monthly fall since May 2020, after a 2.5% June decrease. Multi-family building declined 0.6% (-1.2% y/y), reversing a 0.6% June rise. Home improvement building, however, rose 1.5% (38.3% y/y) in July after a 0.1% June uptick, continuing its meaningful string of gains since August 2021's 2.3%.
Nonresidential private construction rose 0.4% (3.1% y/y) in July, the third consecutive m/m rise, after a 0.2% increase in June (-0.5% initially). Amusement & recreation private construction recovered 1.6% (9.0% y/y) vs. a 0.7% June drop. Religious construction grew 1.3% (1.1% y/y), the third straight monthly gain. Educational private construction rose 1.2% (16.2% y/y), the fifth m/m increase in six months. Communication private construction was up 0.9% (-2.6% y/y), registering the third successive m/m rise following five consecutive m/m declines. Commercial building increased 0.7% (13.7% y/y) after a 0.1% June downtick and two straight m/m rises. Lodging construction grew 0.6% (0.3% y/y), the fifth m/m gain in six months. Manufacturing construction rebounded 0.6% (19.2% y/y), the third m/m gain in four months. Office building was up 0.1% (-1.9% y/y) after a 0.4% June rebound. Utilities private construction ticked up 0.05% (-13.7% y/y) following a 0.5% June rise and three successive m/m drops. Transportation building edged up 0.04% (-7.8% y/y) vs. a 0.9% June decline. In contrast, heath care private construction fell 1.2% (+5.5% y/y) in July after having recovered 1.4% in June.
The value of public construction grew 1.5% (3.3% y/y) in July, the sixth m/m gain in seven months, after a 0.1% uptick in June (-0.5% initially), with residential public construction up 0.8% (3.5% y/y) and nonresidential public construction up 1.5% (3.3% y/y). Spending on highways & streets, which makes up 29.1% of public construction spending, recovered 4.3% (4.3% y/y) following two consecutive m/m drops. Office public construction increased 2.9% (5.7% y/y) after a 2.6% June decrease. Public safety construction grew 2.2% (-4.8% y/y), the third straight m/m gain. Conservation & development public construction rose 1.7% (4.8% y/y) following three successive m/m declines. Commercial public construction was up 0.2% (2.1% y/y), the smallest of three consecutive m/m increases. Utilities public construction rose 0.2% (4.7% y/y), the first m/m rise since March. To the downside, health care public construction fell 1.4% (+6.6% y/y) in July, the first m/m fall since April. Water supply construction slid 0.6% (+20.3% y/y), the first m/m slide since December. Sewage & waste disposal construction declined 0.3% (+7.1% y/y) after a 1.4% June rebound. Educational public construction ticked down 0.1% (-2.1% y/y), the smallest of five straight m/m declines. Amusement & recreation public construction slipped 0.1% (+6.8% y/y) vs. a 2.7% June rise.
The construction spending figures, some of which date back to 1946, can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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