The U.S. Census Bureau of the Department of Commerce announced that construction spending during July 2015 was estimated at a seasonally adjusted annual rate of $1,083.4 billion, 0.7 percent (±1.5 percent) above the revised June estimate of $1,075.9 billion. The July figure is 13.7 percent (±2.0 percent) above the July 2014 estimate of $952.5 billion.
During the first seven months of this year, construction spending amounted to $583.2 billion, 9.3 percent (±1.5 percent) above the $533.7 billion for the same period in 2014.
In July, the estimated seasonally adjusted annual rate of public construction spending was $295.6 billion, 1.0 percent (±2.6 percent) below the revised June estimate of $298.5 billion. Educational construction was at a seasonally adjusted annual rate of $66.4 billion, 3.0 percent (±3.5 percent) below the revised June estimate of $68.4 billion.
Highway construction was at a seasonally adjusted annual rate of $90.3 billion, 0.2 percent (±6.6 percent) below the revised June estimate of $90.5 billion
Spending on private construction was at a seasonally adjusted annual rate of $787.8 billion, 1.3 percent (±1.0 percent) above the revised June estimate of $777.4 billion. Residential construction was at a seasonally adjusted annual rate of $380.8 billion in July, 1.1 percent (±1.3 percent) above the revised June estimate of $376.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $407.0 billion in July, 1.5 percent (±1.0 percent) above the revised June estimate of $400.8 billion.
Private construction is on a roll,” said IHS Global Insight US Economist Patrick Newport. “Private residential spending for the first seven months of the year is up 10.8 percent from last year, with residential and nonresidential up 10.1 percent and 11.5 percent, respectively. Both the single-family and multifamily residential categories and seven of the 11 nonresidential categories are double-digits ahead of last year’s pace. In many nonresidential categories, momentum is building.”
“Public construction is growing again after four fallow years,” Newport said. “These numbers are choppy, however, and it is too soon to tell if a trend is developing or if spending will flatten again.
“For economic growth to accelerate from its lackluster pace of the past few years, demand from some source must accelerate first,” Newport concluded. “The construction sector, which currently makes up about 5 percent of GDP, may prove to be one of these sources. Core construction played a pivotal role in the second quarter, contributing 1.3 percentage points to GDP growth (this will be revised up to about 1.4 percentage points in the upcoming GDP release.) Its third quarter contribution will be smaller – perhaps half or less of its second quarter contribution – but still be outsized.”