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Economy in Brief

U.S. Construction Spending Falters in May
by Tom Moeller  July 1, 2021

• Private nonresidential building activity declines sharply.

• Residential building improves slightly.

• Public sector construction continues to ease.

The value of construction put-in-place weakened 0.3% (+7.5% y/y) during May after edging 0.1% higher in April, revised from 0.2%. A 0.5% May increase had been expected in the Action Economics Forecast Survey. Figures back through 2019 were revised.

Private construction slipped 0.3% (+13.2% y/y) in May and reversed a 0.3% April gain. Residential construction improved 0.2% (28.7% y/y) as single-family building rose 0.8% (46.1% y/y) for the second straight month. Multi-family building eased slightly (+25.6% y/y) after two months of strong increase. Home improvement expenditures fell 0.6% (+8.9% y/y) after holding steady in April.

Nonresidential construction declined 1.1% in May (-5.8% y/y) after falling 0.5% during April. Transportation building strengthened 5.5% (-4.0% y/y) and reversed the 4.0% April falloff. Offsetting this increase, lodging construction fell 3.0% (-23.2% y/y) and education construction declined 3.0% (-19.9% y/y). Commercial building eased 0.7% (-2.6% y/y) while office building held steady (-8.3% y/y).

The value of public construction fell 0.2% during May (-8.7% y/y). It was the fifth consecutive monthly decline. Spending on highways & streets, which makes up nearly one-third of public spending, improved 1.4% (-4.3% y/y) and outlays on health care units eased 0.4% (+1.3% y/y). Power construction rose 0.5% (5.6% y/y).

The construction spending figures, some of which date back to 1946 can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.

Construction Put in Place (SA, %) May Apr Mar May Y/Y 2020 2019 2018
Total -0.3 0.1 1.0 7.5 5.8 4.2 4.1
  Private -0.3 0.3 1.4 13.2 6.0 2.1 4.0
    Residential 0.2 0.7 2.2 28.7 15.1 -2.2 3.5
    Nonresidential -1.1 -0.5 0.1 -5.8 -4.0 7.3 4.7
  Public -0.2 -0.6 -0.2 -8.7 5.2 11.1 4.3
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