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Economy in Brief

U.S. Construction Spending Rises in July; May Revised Up to a Gain from a Decline
by Winnie Tapasanun  September 1, 2021

• Residential private construction rises for the fifth straight month.

• Nonresidential private construction falls for the third time in four months.

• Public sector construction posts the first monthly gain since December.

The value of construction put-in-place rose 0.3% (9.0% y/y) in July after a 0.04% dip in June (originally +0.1%) and a 0.7% gain in May (originally -0.2%), according to the U.S. Census Bureau. A 0.3% July increase had been expected in the Action Economics Forecast Survey.

Private construction increased 0.3% (13.6% y/y) in July, the fifth straight m/m gain, on top of a 0.4% rise in June. Residential private construction rose 0.5% (27.0% y/y), the fifth consecutive m/m rise, after a 0.8% advance. Single-family building grew 0.9% (47.1% y/y), registering the 13th straight m/m gain. Multi-family building dipped 0.05% (+14.9% y/y) after a 0.4% decline. Home improvement expenditures grew 0.2% (7.7% y/y), the fourth m/m rise in five months, following a 0.7% drop.

Nonresidential private construction slid 0.2% in July (-3.6% y/y), the third m/m slide in four months, after a 0.3% decline in June. Transportation building fell 1.0% (-4.5% y/y), the first m/m fall since April. Communication private construction dropped 0.6% (-5.6% y/y). Lodging construction ticked down 0.1% (-29.8% y/y), the fourth successive m/m decline. Commercial building dipped 0.02% (+4.6% y/y) while office building slipped 0.1% (-6.1% y/y). In contrast, amusement & recreation construction rebounded 1.6% (-11.6% y/y) after falling 2.2%. Religious construction recovered 1.0% (-8.7% y/y), the third m/m rise in four months. Educational private construction rose 0.5% (-19.6% y/y), the first m/m gain since November. Heath care private construction increased 0.2% (-2.4% y/y), the fourth m/m gain in five months.

The value of public construction rose 0.7% in July (-5.1% y/y), the first m/m rise since December, after a 1.6% decrease in June. Spending on highways & streets, which makes up 28.0% of public construction spending, recovered 1.9% (-0.1% y/y), still off 7.9% since December. Utilities construction grew 2.3% (29.8% y/y), the ninth m/m gain in 10 months, on top of a 3.3% rise. Commercial public construction rebounded 1.7% (-19.8% y/y) following three straight monthly drops. Conservation & development public construction rose 1.6% (-21.0% y/y), the third consecutive m/m rise. Health care public construction, however, fell 0.8% (+1.2% y/y) after a 1.6% rise.

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, %) Jul Jun May Jul Y/Y 2020 2019 2018
Total 0.3 0.0 0.7 9.0 5.6 4.3 4.2
  Private 0.3 0.4 1.1 13.6 5.8 2.3 4.0
    Residential 0.5 0.8 1.3 27.0 15.1 -2.0 3.4
    Nonresidential -0.2 -0.3 0.7 -3.6 -4.2 7.5 4.8
  Public 0.7 -1.6 -0.8 -5.1 4.9 11.0 4.6
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