Construction Spending Increases Slower Than Expected
Total construction spending remained relatively unchanged for the month of July; however, the slight increase was less than expected. Spending inched forward 0.1% in July, according to the U.S. Census Bureau. The seasonally adjusted annual rate of $1,364.6 billion is also 0.1% below July 2019.
Economists predicted spending would increase 1% in July, states Reuters.
The industry has fared better than others during the pandemic, yet "the construction industry has certainly not been immune to the negative impacts of the COVID-19 crisis and total spending remains about 5.3% below February's peak," states a report from Wells Fargo Securities.
Private spending was up 0.6% in July thanks in part to a 2.1% jump in residential construction. Much of the private, nonresidential categories were down from month to month, some down significantly from July 2019 as well. Transportation increased 3.2% from June to July but remains 1% below July 2019.
Total public construction spending slipped 1.3% in July, but it is 5.1% above data from one year ago. Commercial spending increased 4.5% in July, while power and conservation and development were each up more than 3.5%. Public safety spending is ahead nearly 60% compared to July 2019.
"The path forward for construction looks to be forked," continued to Wells Fargo release. "Residential activity will likely continue to strengthen as builders try to catch up with blistering homebuyer demand. … On the other hand, heightened economic uncertainty will likely prevent many nonresidential projects from moving forward."
-Michael Miller, managing editor