Dive Brief:
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Spending on construction projects in June remained about the same as in May — up 0.1% — but compared with June 2014, it was up by approximately 11.5%, the U.S. Census Bureau reported on Monday.
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Spending on nonresidential construction in the first six months of this year represents the largest year-over-year growth during a calendar year’s first half since 2002, when the U.S. Census Bureau began keeping track, Associated Builders and Contractors Chief Economist Anirban Basu said in a statement. When spending on residential construction is included, the year-over-year gains are the highest since 2006, according to a separate report by The Associated General Contractors of America.
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The nonresidential report would have been much different if it weren’t for a poor showing by the power industry. Largely because of falling oil prices, construction spending in the power sector dropped by 16.5% over the past year, the ABC report said.
Dive Insight:
But spending in eight of the other 15 construction sectors included in the measurement grew between May and June, and all of them expanded on a yearly basis. Because the power sector accounts for a large portion of construction spending, a decline in that sector dragged the whole industry down.
“Had power simply remained unchanged,” Basu noted, “nonresidential construction spending would currently stand at its highest level ever.”
In a separate statement, AGC Chief Economist Ken Simonson called on federal, state and local governments to expand technical education programs and reform immigration laws in an effort to train construction workers to fill the jobs that increased spending inevitably will create.
The progress in most sectors “serves as further proof of the recovery for nonresidential construction,” Basu said. “Despite the lack of growth on a monthly basis in June, along with the overall economy’s lukewarm growth, most contractors are markedly busier than they were a year ago.”