Nonresidential construction spending retains momentum

Nonresidential construction spending was unchanged on a month-over-month basis in June, but is up 11.5 percent on a year-over-year basis, according to a report released Aug. 3 by the U.S. Census Bureau. Nonresidential construction spending totaled $686.9 billion on a seasonally adjusted, annualized basis for the month and increased 9.8 percent during the year's first half.

"Today's release represents the largest year-over-year growth during a calendar year's first six months since the Census Bureau began tracking construction spending in 2002 and serves as further proof of the recovery for nonresidential construction," said Associated Builders and Contractors Chief Economist Anirban Basu. "Despite the lack of growth on a monthly basis in June, along with the overall economy's lukewarm growth, most contractors are markedly busier than they were a year ago. May's nonresidential construction figure was revised upward by 2.6 percent and April's by 1.4 percent; therefore, it is conceivable that June's estimate will eventually be revised higher as well.

"Exactly half of the 16 nonresidential construction sectors experienced growth in June," said Basu. "On a yearly basis, 15 of those 16 sectors have expanded. However, the one sector that failed to grow during the past year, power, happens to be the largest. Had power simply remained unchanged during hat time period—it's down 16.5 percent largely because of the fall in oil prices—nonresidential construction spending would currently stand at its highest level ever."

Eight of 16 nonresidential construction sectors experienced spending increases in June on a monthly basis:

· Lodging-related construction spending was up 3.9 percent on a monthly basis and 42.2 percent on a year-over-year basis.

· Spending in the water supply category expanded 12.2 percent from May and is up 12 percent on an annual basis.

· Highway and street-related construction spending expanded 1.3 percent in June and is up 14.8 percent compared to the same time last year.

· Amusement and recreation-related construction spending was up 10.2 percent on a monthly basis and is up 39.2 percent from the same time last year.

· Communication-related construction spending fell 6.8 percent for the month, but is up 13.4 percent compared to June 2014.

· Construction spending in the transportation category grew 2.3 percent on a monthly basis and has expanded 9.6 percent on an annual basis.

· Sewage and waste disposal-related construction spending increased 1.6 percent for the month and has expanded 5.3 percent on a 12-month basis.

· Public safety-related construction spending grew 2.5 percent on a monthly basis, but is down 3.1 percent on a year-over-year basis.

Spending in eight nonresidential construction subsectors fell in June on a monthly basis:

· Education-related construction spending fell 0.2 percent for the month, but is up 2.1 percent on a year-over-year basis.

· Power-related construction spending fell 0.9 percent for the month and has declined 16.5 percent from June 2014, the steepest decline for any nonresidential category.

· Commercial construction spending fell 4.3 percent in June, but is up 7.6 percent on a year-over-year basis.

· Health care-related construction spending fell 0.9 percent for the month, but is up 6.3 percent on a year-over-year basis.

· Manufacturing-related construction spending fell 0.8 percent in June, but is up 62.1 percent compared to June 2014.

· Office-related construction spending fell 1.1 percent in June, but is up 24.4 percent from the same time one year ago.

· Conservation and development-related construction spending fell 5.8 percent for the month, but is up 6.5 percent on a yearly basis.

· Religious spending fell 6.2 percent for the month, but is up 5 percent from the same time last year.