Total construction spending slipped in June as residential spending fell flat and private nonresidential and public construction declined, according to an analysis of federal data by the Associated General Contractors of America (AGC).
“New single-family and multifamily construction both had rare slowdowns in June, while private nonresidential construction remained stuck in neutral as it has all year and the long slump in public construction worsened,” said Ken Simonson, AGC’s chief economist. “For the rest of 2013, private construction appears likely to grow again but public spending is showing no signs of a recovery.”
Construction put in place totaled $884 billion in June, down 0.6 percent from May but up 3.3 percent from June 2012. Those earlier figures included steep upward revisions to residential improvements as the Census Bureau corrected improvements data back to January 2012. Despite the dip in June, spending that month was still the second-highest level since August 2009.
Private residential spending was flat for the month and 18 percent higher than in June 2012. New single-family construction slid 0.8 percent in June but was 28 percent above the year-ago mark. New multifamily spending fell 3.3 percent in June but shot up 41 percent year-over-year.
Private nonresidential spending slipped 0.9 percent in June and rose 1.4 percent year-over-year. Public construction spending shrank 1.1 percent for the month and 9.3 percent over 12 months.
“The major private nonresidential segments show divergent trends,” Simonson said. “Power construction, which includes oil and gas fields and pipelines as well as electricity, climbed for the fifth straight month in June, even after Census posted large upward revisions for May and April. But such major categories as manufacturing, health care and retail construction remain in the doldrums. Meanwhile, the largest public categories—highways and education construction—are now plummeting at double-digit rates.”
AGC officials stressed the importance of making infrastructure investment a top priority for the new fiscal year beginning in October.
“Infrastructure spending is essential for economic growth, health and safety,” said Stephen E. Sandherr, the association’s chief executive officer. “Congress should make adequate funding for infrastructure a top priority next month when it works on appropriations bills to fund the government for the year beginning in October.”