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Economy in Brief

U.S. Construction Weakens Again in June
by Tom Moeller  August 3, 2020

• Construction spending scaled back for the fourth straight month.

• Residential building leads the way lower.

Construction activity remains weak. The value of construction put-in-place eased 0.7% (+0.1 y/y) during June following a 1.7% May decline, revised from -2.1%. A 1.0% increase had been expected in the Action Economics Forecast Survey.

Private construction weakened 0.7% in June (-1.9% y/y) after falling sharply for three straight months. Private residential construction fell 1.5% (-0.8% y/y), down for the fourth consecutive month. Single-family building weakened 3.6% (-7.6% y/y) after falling by 7.7% in each of the prior two months. Spending on improvements dropped 0.4% (+10.0% y/y) after edging 0.7% higher in May. To the upside, multi-family construction activity increased 3.0% (-2.1% y/y), up for the fifth month this year.

Nonresidential private construction edged 0.2% higher (-3.2% y/y). Commercial building fell 1.3% (+2.0% y/y) while office construction improved 0.3% (-3.5% y/y). Manufacturing building strengthened 1.7% (-9.1% y/y) while health care rose 1.7% (0.6% y/y). Amusement facility building remained under pressure and fell 6.2% (-14.7% y/y).

Public construction weakened 0.7% (6.2% y/y). Within the two of the largest sectors, road construction weakened 1.7% (+3.7% y/y) and school building fell 2.7% (+5.5% y/y). Office construction eased 0.3% (+6.8% y/y).

The construction spending figures, some of which date back to 1946 can be found in Haver's USECON database. Mortgage interest rates and loan applications from the Mortgage Bankers Association are in the SURVEYW database and the expectations reading is in the AS1REPNA database.

Construction Put in Place (SA, %) Jun May Apr Jun Y/Y 2019 2018 2017
Total -0.7 -1.7 -3.4 0.1 2.3 4.1 4.7
  Private -0.7 -2.7 -3.7 -1.9 0.6 4.0 6.3
    Residential -1.5 -3.6 -4.4 -0.8 -2.5 3.5 12.5
    Nonresidential 0.2 -1.5 -2.9 -3.2 4.4 4.7 -0.4
  Public -0.7 1.3 -2.5 6.2 8.0 4.4 -0.2
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