U.S. Construction Spending Unexpectedly Falls in July; First M/M Drop Since Oct. ’22
Summary
- July construction spending -0.3% m/m (+6.7% y/y); June and May revised up.
- Residential private construction -0.4% m/m, led by a 1.9% decrease in single-family building.
- Nonresidential private construction -0.4% m/m, the first monthly decline since March.
- Public sector construction +0.1% m/m, led by a 0.2% rebound in nonresidential public building.
The value of construction put in place fell 0.3% m/m in July after holding virtually steady in June (-0.3% initially) and rising 0.2% in May (-0.4% previously), according to the U.S. Census Bureau. The July reading was the first m/m fall since October 2022. A 0.1% m/m July increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 6.7% in July from 7.2% in June, registering the lowest pace since July 2023’s 5.3%. The latest y/y figure was above 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 slid 0.4% (+6.3% y/y) in July, the first m/m slide since March, following upwardly revised increases of 0.3% in June (-0.3% initially) and 0.3% in May (-0.4% previously). Residential private construction declined 0.4% (+7.7% y/y) in July, down for the first time in four months, after a 0.4% increase in June. Single-family building fell 1.9% (+4.0% y/y), the fourth consecutive m/m fall, after a 1.1% June decrease; it was 44.8% of the residential private construction. Multi-family building was virtually unchanged m/m (-6.7% y/y) following a 0.6% June decline and six straight m/m decreases in the prior months; it was 13.7% of the residential private construction. To the upside, home improvement building rose 1.2% (18.3% y/y) in July after a 2.5% gain in June, posting the fourth straight m/m rise and the seventh m/m in eight months; it was 41.5% of the residential private construction.
Nonresidential private construction fell 0.4% (+4.5% y/y) in July, the first m/m fall since March, after holding essentially steady in June. The July fall reflected m/m drops in the following nonresidential private constructions. These included health care (-2.8%; +1.7% y/y), religious (-2.2%; +4.4% y/y), amusement & recreation (-2.0%; -3.9% y/y), educational (-0.9%; +5.2% y/y), communication (-0.8%; -0.1% y/y), utilities (-0.7%; +8.8% y/y), commercial (-0.4%; -14.8% y/y), and lodging (-0.4%; -9.2% y/y). To the positive side, transportation private construction, the only category with a monthly gain in July, rose 3.4% (9.0% y/y), the largest of six straight m/m rises, on top of a 1.4% June increase. Meanwhile, manufacturing private construction (-0.01%; +20.2% y/y) and office private construction (+0.03%; +1.9% y/y) were virtually unchanged m/m in July.
The value of public construction rebounded 0.1% (8.1% y/y) in July, the fifth m/m increase in six months, following a 0.7% drop in June (-0.4% initially), reflecting a 2.6% decline (+3.9% y/y) in residential public construction and a 0.2% rebound (8.2% y/y) in nonresidential public construction. The July increase reflected m/m rises in the following nonresidential public constructions. These included commercial (4.1%; 35.0% y/y), office (3.7%; 8.9% y/y), utilities (3.4%; 17.1% y/y), water supply (2.2%; 17.3% y/y), health care (0.9%; 2.4% y/y), amusement & recreation (0.7%; 22.1% y/y), transportation (0.5%; 6.2% y/y), conservation & development (0.2%; 8.0% y/y), and sewage & waste disposal (0.2%; 11.2% y/y). To the downside, the following public constructions dropped m/m in July: educational (-0.9%; +3.6% y/y) and public safety (-0.9%; +27.7% y/y). Notably, spending on highways & streets, which made up 29.1% of public construction spending, fell 0.8% (+3.7% y/y) in July, the sixth m/m fall in seven months, on top of a 0.4% decline in June.
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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