Construction spending during June 2017 was estimated at a seasonally adjusted annual rate of $1,205.8 billion, 1.3 percent (±1.5 percent) below the revised May estimate of $1,221.6 billion. The June figure is 1.6 percent (±1.8 percent) above the June 2016 estimate of $1,186.4 billion.
During the first six months of this year, construction spending amounted to $577.0 billion, 4.8 percent (±1.3 percent) above the $550.5 billion for the same period in 2016.
Spending on private construction was at a seasonally adjusted annual rate of $940.7 billion, 0.1 percent (± 1.2 percent) below the revised May estimate of $941.3 billion. Residential construction was at a seasonally adjusted annual rate of $502.9 billion in June, 0.2 percent (±1.3 percent) below the revised May estimate of $504.0 billion.
Nonresidential construction was at a seasonally adjusted annual rate of $437.8 billion in June, 0.1 percent (± 1.2 percent) above the revised May estimate of $437.3 billion.
Public construction In June was estimated at a seasonally adjusted annual rate of $265.1 billion, 5.4 percent (±2.6 percent) below the revised May estimate of $280.3 billion.
Highway construction was at a seasonally adjusted annual rate of $82.4 billion, 6.6 percent (±6.7 percent) below the revised May estimate of $88.2 billion.
“Construction spending is still increasing overall but growth has become much more uneven across categories in recent months,” said Ken Simonson, the Associated General Contractors chief economist. “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.”
Association officials urged Congress and the Trump administration to work together to enact new measures to fund and finance needed upgrades to the nation’s aging infrastructure. They noted that these investments are necessary to protect against further deterioration of the nation’s public works. And they added that the new investments would help offset slackening demand for construction.
“Washington officials need to act quickly to rebuild our public works before bad roads, unclean water and unreliable power systems begin to serve as a drag on broader economic growth,” said Stephen E. Sandherr, the association’s chief executive officer.
“Coming into the year, there were high hopes for infrastructure spending in America,” said Associated Builders & Contractors Chief Economist Anirban Basu. “The notion was that after many years of a lack of attention to public works, newfound energy coming from Washington, D.C., would spur confidence in federal funding among state and local transportation directors as well among others who purchase construction services. Instead, public construction spending is on the decline in America. Categories including public safety and flood control have experienced dwindling support for investment, translating into a nine percent decline in public construction spending over the past 12 months.
“On the other hand, several private segments continue to manifest strength in terms of demand for construction services,” said Basu. “At the head of the class are office construction, driven by a combination of job growth among certain office-space-using categories as well as lofty valuations, and communications, which is being driven largely by enormous demand for data center capacity.
“While there are certainly some parts of the nation experiencing significant levels of public construction, those areas have increasingly become the exception as opposed to the rule,” said Basu. “The more general and pervasive strength is in private segments. Based on recent readings of the architecture billings index and other key leading indicators, commercial contractors are likely to remain busy for the foreseeable future. The outlook for construction firms engaged in public work remains unclear.”