U.S. Construction Spending Rises Much Less Than Expected In June

Even with the June slowdown, construction spending advanced to a seasonally adjusted annual rate of $1.06 trillion, the best pace in seven years.

The report said construction spending inched up by 0.1% to an annual rate of USD1.065 trillion in June from the revised May estimate of USD1.064 trillion.

The Commerce Department noted that total construction spending in June was up by 12.0 percent compared to the same month a year ago.

Thomson ReutersMen work on a construction site for a luxury apartment complex in downtown Los AngelesWASHINGTON, (Reuters) – U.S. construction spending barely rose in June as private outlays posted their biggest drop in a year, but the underlying trend suggested the economy remained on solid ground.

“Today’s release represents the largest year-over-year growth during a calendar year’s first six months since the Census Bureau began tracking construction spending in 2002 and serves as further proof of the recovery for nonresidential construction”, said Associated Builders and Contractors Chief Economist Anirban Basu.

Spending on private construction was at a seasonally adjusted annual rate of $766.4 billion, 0.5 percent (±0.8 percent) below the revised May estimate of $770.0 billion. Those measures, which include expanding career and technical education opportunities, making it easier for firms to establish regional training programs and immigration reform, are designed to make it easier to recruit and prepare new construction workers. Highway construction was at a seasonally adjusted annual rate of $90.9 billion, 1.2 percent above the revised May estimate of $89.8 billion.

Educational construction was at a seasonally adjusted annual rate of $67.2 billion, 0.2% (±5.1%) above the revised May estimate of $67.1 billion. Economists polled by MarketWatch had expected a 0.8% increase.

The June figure is 12.0% (±2.1%) above the June 2014 estimate of $950.3 billion.

Office buildings were down 1.1% from May, to $55.4 billion, but surged 24.4% year over year.