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U.S. construction spending slides as public outlays tumble

0 31 Economic

by DCN News Services

ARLINGTON, VA. — U.S. construction spending in June declined from May but increased from a year ago as public investment shrank for nearly every type of structure, according to an analysis of new government data by the Associated General Contractors of America.
U.S. construction spending slides as public outlays tumble

"Construction spending is still increasing overall but growth has become much more uneven across categories in recent months," said Ken Simonson, the association's chief economist, in a media statement issued Aug. 1. "There has been a steep decline in public investment in nearly all types of construction over the past year. Private nonresidential construction is still rising overall but generally at slower rates than was occurring a few months ago."

Construction spending in June totalled $1.206 trillion at a seasonally adjusted annual rate, a drop of 1.3 per cent from the downwardly revised May total and up 1.6 per cent from a year earlier, Simonson indicated in a release. He noted that every public spending category recorded a decrease for the month and nearly all were lower than a year ago, while multifamily construction and several private nonresidential categories also declined or had smaller increases than previously.

Public construction spending plunged 5.4 per cent from the prior month and 9.5 per cent from June 2016 to June 2017. The spending rate in June was the lowest seasonally adjusted rate since February 2014.

The biggest public segment — highway and street construction — slumped 8.1 per cent from a year earlier.

Among other major public infrastructure categories, spending on transportation facilities such as transit and airport construction dropped 3.9 per cent year-over-year; spending on sewage and waste disposal plummeted 16.1 per cent; and spending on water supply fell 17.7 per cent. Public spending on educational structures declined 7.3 per cent from a year ago.

Private nonresidential spending inched up 0.1 per cent for the month and 1.1 per cent over 12 months, the report indicates. The largest private nonresidential segment was power construction (including oil and gas field and pipeline projects), which dropped 5.4 per cent from June 2016 to June 2017.

The next-largest segment, commercial (retail, warehouse and farm) construction, climbed 13.8 per cent year-over-year. Manufacturing construction declined 7.7 per cent for the year. Private office construction increased 12.6 per cent since June 2016.

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