U.S. Construction Spending Unexpectedly Drops in June; Down for the Second Straight Month
Summary
- June construction spending -0.3% m/m; +6.2% y/y, the lowest since July ’23.
- Residential private construction -0.3% m/m, led by a 1.2% decrease in single-family building.
- Nonresidential private construction -0.1% m/m, the fourth m/m decline in five months.
- Public sector construction -0.4% m/m, reflecting m/m drops in both residential & nonresidential public buildings.
The value of construction put in place fell 0.3% m/m in June after a downwardly revised 0.4% drop in May (-0.1% initially) and an upwardly revised 1.3% rise in April (+0.3% previously), according to the U.S. Census Bureau. The June reading was the second consecutive m/m decline following a string of gains during the November 2022 to April 2024 period. A 0.2% m/m June increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 6.2% in June, the lowest since July 2023, from 7.1% in May. The latest y/y figure was above 5.5% in June 2023 and a low of 3.8% in April 2023; nevertheless, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.
Private construction fell 0.3% (+5.9% y/y) in June, the third m/m fall in four months, following a 0.4% decline in May (-0.3% initially) and a 1.6% gain in April (+0.4% previously). Residential private construction fell 0.3% (+7.3% y/y) in June, down for the third month in four, on top of a 0.7% drop in May. Single-family building slid 1.2% (+9.9% y/y), the third successive m/m slide, after a 0.6% May decline; it was 46.4% of the residential private construction. To the upside, home improvement building rose 0.6% (10.4% y/y) in June, the fifth m/m rise in seven months, after a 0.8% drop in May; it was 39.5% of the residential private construction. Multi-family building edged up 0.1% (-7.4% y/y), the first m/m increase since November, following a 0.6% May decline; it was 14.0% of the residential private construction.
Nonresidential private construction dipped 0.1% (+4.2% y/y) in June, down for the fourth time in five months, after a 0.2% drop in May. The June decline reflected m/m decreases in the following nonresidential private constructions. These included commercial (-0.8%; -14.3% y/y), health care (-0.8%; +3.2% y/y), religious (-0.6%; +6.0% y/y), and utilities (-0.6%; +11.7% y/y). In contrast, the following private constructions rose m/m in June: transportation (1.1%; 4.7% y/y), amusement & recreation (0.8%; -8.6% y/y), office (0.6%; -0.4% y/y), lodging (0.3%; -11.0% y/y), manufacturing (0.1%; 19.1% y/y), and communication (0.1%; 0.9% y/y). Meanwhile, educational private construction was virtually unchanged m/m (+2.8% y/y) in June after two straight m/m drops.
The value of public construction fell 0.4% (+7.3% y/y) in June following a downwardly revised 0.2% decline in May (+0.5% initially) and three consecutive m/m increases, reflecting m/m drops of 2.0% (+10.3% y/y) in residential public construction and 0.4% (+7.2% y/y) in nonresidential public construction. The June fall reflected m/m declines in the following nonresidential public constructions. These included commercial (-5.4%; +11.0% y/y), office (-3.3%; +7.6% y/y), health care (-2.9%; +0.1% y/y), educational (-0.9%; +4.8% y/y), utilities (-0.5%; +15.5% y/y), and sewage & waste disposal (-0.2%; +6.9% y/y). Notably, spending on highways & streets, which made up 29.7% of public construction spending, slid 0.4% (+5.7% y/y), the fifth m/m slide in six months, on top of a 1.1% May decline. To the upside, the following public constructions rose m/m in June: conservation & development (5.2%; 2.9% y/y), water supply (0.9%; 10.6% y/y), public safety (0.8%; 28.5% y/y), amusement & recreation (0.3%; 18.3% y/y), and transportation (0.1%; 2.6% y/y).
The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.
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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