Dive Brief:
- Construction spending remained unchanged in July at a seasonally adjusted annual rate of $1.153 trillion, nearly the same as the upwardly revised rate of $1.153 trillion in June, the Commerce Department reported Thursday.
- Private nonresidential construction rose 1.7% in July, and private residential construction spending inched up 0.3%. Within residential, single-family spending slipped 0.2%, while multifamily fell 0.6%. Public construction spending declined 3.1% in July.
- July construction spending was still 1.5% higher than July 2015, and spending in the first seven months of 2016 was 5.6% higher than the same period last year.
Dive Insight:
The Commerce Department revised May and June figures to show gains rather than declines, with May up 0.1% and June up 0.9%. Stronger growth in construction spending in July was once again held back by the public sector, which has seen an ongoing pattern of declines. Industry groups have consistently called on government at all levels to boost public funding to build and repair necessary infrastructure.
Despite the ongoing decline in public construction, the bump in nonresidential spending was positive news for the segment. Spending in the nonresidential sector reached its highest level ever in July, at a $429.5 billion seasonally adjusted rate, due largely to office and shopping center construction, according to the Associated Press.
The Commerce Department report offered a somewhat more optimistic view of the industry than a recent report from Dodge Data & Analytics, which found a 2% dip in the value of new projects between June and July — due largely to the plunging electric utility sector. However, on the positive side, the Dodge Momentum Index rose for the fourth consecutive month in July, which indicates a likely rise in construction spending in the next year.
