Construction spending contracted modestly in June, according to the U.S. Census Bureau. The seasonally adjusted annual rate of spending fell 0.6 percent on the month to $883.9 billion, below the Bureau’s May estimate of $889.4 billion and missing market expectations for a fractional increase. However, construction spending is still up 3.3 percent on the year.
Spending for the first six months of the year is up 5.1 percent compared to the year-ago period, largely reflecting increases in residential spending.
Residential spending fell 0.1 percent on the month in June but was still up 17.6 percent on the year, supporting a myriad of indicators pointing to health in the housing market. Non-residential spending was down 1 percent on the month and down 4 percent on the year.
Total private construction spending climbed 9.7 percent on the year to $622.8 billion, or 70 percent of total spending, while total public construction spending declined 9.3 percent to $261 billion, accounting for the remaining 30 percent of total spending.
A strengthening housing market can be credited with a general increase in construction spending in 2012 and throughout most of 2013. Overall construction spending fell consistently between 2007 and 2011 and has only really begun picking up steam as lending conditions ease and demand for new homes increases.