MDM provides a synopsis of construction spending trends each month, with a look at the segments of construction that gained and lost during the month.
Construction spending in July 2013 increased 0.6 percent from the month before and increased 5.2 percent from July 2012. Here is the breakdown:
- Private residential construction spending was up 0.6 percent from June and increased 17 percent year-over-year.
- Private nonresidential construction spending was up 1.3 percent from June and increased 2 percent year-over-year.
- Public construction spending was down 0.3 percent from June and declined 3.7 percent year-over-year.
The July 2013 data was released September 3.
“July represented a period of accelerated progress in terms of private nonresidential construction spending,” said Associated Builders and Contractors Chief Economist Anirban Basu. “However, a deeper look at the data indicates recovery remains subdued in many key segments.
“For example, within the commercial construction segment, construction spending was down 3 percent in the automotive category, 6 percent in the dining/drinking category and 31 percent in the mini-storage category,” Basu said. “All of this indicates that even in the fifth year of economic expansion, recovery in the nonresidential construction sector remains sporadic.” The impact of strained public finances, he said, continues to be felt.
“The patterns seen earlier this year reappeared in July, with strong year-over-year gains in single- and multifamily building, a range of results for private nonresidential categories and deepening downturns in most public segments,” said Ken Simonson, chief economist for The Associated General Contractors of America.
Simonson said current trends are likely to hold for the remainder of 2013, and full-year results will be mixed. “Multifamily construction will keep expanding and single-family homebuilding should do well in most regions. Private nonresidential spending will be very uneven and public construction spending remains threatened,” he said.
ABC’s Basu said contractors and other stakeholders have reason to remain cautious heading into the second half. “Federal Reserve monetary policy is poised to shift during the next several months, and additional unexpected increases in interest rates could serve to suppress the pace of economic expansion,” he said.
According to Census Bureau data, the following construction segments overall had the greatest gains or declines in spending in July 2013 from July 2012. It is not broken out by private vs. public sectors.
Winners: Largest Gains from July 2012
- Lodging: +29.9%
- Residential: +16.8%
- Transportation: +11.3%
- Water supply: +9.5%
- Power: +6.1%
Losers: Largest Losses or Smallest Gains from July 2012
- Religious: -18.1%
- Public safety: -14.1%
- Amusement and recreation: -12.6%
- Communication: -12.5%
- Conservation and development: -12.3%