U.S. Construction Spending Unexpectedly Falls in June After Eight Straight M/M Gains
Summary
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Total construction -1.1% m/m (+8.3% y/y); May revised up but April revised down.
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Residential private construction drops 1.6% m/m, first decline since May '20, led by monthly decreases of 3.1% in single-family building and 0.3% in home improvement building.
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Nonresidential private construction declines 0.5% m/m, down for the fourth straight month.
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Public sector construction falls 0.5% m/m, down for the second consecutive month following four successive m/m rises, led by a 0.5% decline in nonresidential public construction.
The value of construction put in place fell 1.1% m/m (+8.3% y/y) in June after an upwardly revised 0.1% uptick in May (-0.1% initially) and a downwardly revised 0.7% rise in April (+0.8% previously), according to the U.S. Census Bureau. The June m/m reading was the first monthly decline since September and the deepest since April 2020. A 0.3% m/m June increase had been expected in the Action Economics Forecast Survey.
Private construction fell 1.3% (+10.4% y/y) in June following an upwardly revised 0.2% May increase (+0.01% initially) and seven straight m/m gains. Residential private construction slid 1.6% (+15.6% y/y), the first m/m slide since May 2020 and the deepest since April 2020, after a 0.8% May rise. Single-family building fell 3.1% (+8.4% y/y), the first monthly fall since October and the largest since May 2020, after a 0.3% May increase. Home improvement building was down 0.3% (+33.0% y/y), the first m/m decline since September 2020, after a 1.9% May increase. Multi-family building, however, rose 0.4% (-0.1% y/y) in June following a 0.4% May decline and a 0.3% April increase.
Nonresidential private construction fell 0.5% (+1.7% y/y) in June, the fourth straight m/m fall, after a 0.9% drop in May. Religious construction decreased 2.8% (-0.4% y/y) vs. a 6.6% May rebound. Utilities private construction fell 1.8% (-14.9% y/y), the fourth successive m/m fall. Transportation building dropped 1.0% (-6.4% y/y) vs. two consecutive monthly rises. Heath care private construction slid 0.9% (+2.6% y/y), the second consecutive m/m slide. Commercial building fell 0.6% (+10.8% y/y), the third monthly fall in four months. Lodging construction eased 0.2% (-5.5% y/y) following two straight m/m gains. Amusement & recreation private construction dipped 0.1% (+5.4% y/y), the third monthly decline in four months. Manufacturing construction ticked down 0.1% (+20.2% y/y), the first m/m easing since March. In contrast, communication private construction rose 1.0% (-3.0% y/y) following a 0.5% May rise and five straight m/m drops. Office building grew 0.5% (-2.1% y/y) vs. a 0.3% May decline. Educational private construction ticked up 0.1% (17.5% y/y), the fourth m/m increase in five months.
The value of public construction fell 0.5% (+0.4% y/y) in June after a 0.7% decline in May, with residential public construction up 0.5% (-2.1% y/y) and nonresidential public construction down 0.5% (+0.5% y/y). Spending on highways & streets, which makes up 28.2% of public construction spending, worsened 2.7% (-1.1% y/y), the third m/m decrease in four months. Office public construction slid 1.8% (+3.4% y/y), the third m/m slide in four months, after a 3.0% May increase. Educational public construction fell 0.7% (-4.8% y/y), the fourth consecutive m/m fall. Utilities public construction eased 0.2% (+21.9% y/y), the third straight monthly decline. Public safety construction was unchanged (-6.5% y/y) following a 3.9% May rebound. To the upside, water supply construction jumped 7.4% (13.2% y/y), the largest of six straight monthly rises. Commercial public construction increased 2.4% (1.9% y/y), the fourth m/m advance in five months. Health care public construction rose 1.7% (11.2% y/y), the fifth monthly rise in six months. Conservation & development public construction rebounded 1.7% (10.5% y/y) following two successive monthly drops. Amusement & recreation public construction rose 1.5% (2.7% y/y) vs. a 1.8% May decrease. Sewage & waste disposal construction grew 0.5% (7.0% y/y), the fifth m/m increase in six months, after a 0.3% May decline.
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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