Nonresidential construction spending up 11.5% YOY in June

While nonresidential construction spending remained steady on a month-over-month basis in June, a report released by the U.S. Census Bureau found that spending is up 11.5% on a year-over-year basis.

Nonresidential construction spending totaled $686.9 billion on a seasonlly adjusted annualized basis for the month.

According to Associated Builders and Contractors Chief Economist Anirban Basu, this is the largest year-over-year growth over the first six months of a year since construction spending was tracked in 2002.

Also, eight of the 16 nonresidential construction sectors experienced growth in June. In those eight sectors, lodging construction spending was up 42.2% on the year, and amusement and recreation construction spending was up 39.2% comapred to one year ago. Transportation, sewage, and highway construction spending, among other areas, have increased this year as well.

“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 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% and April’s by 1.4%; 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 that time period—it’s down 16.5% 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% on a monthly basis and 42.2% on a year-over-year basis.
• Spending in the water supply category expanded 12.2% from May and is up 12% on an annual basis.
• Highway and street-related construction spending expanded 1.3% in June and is up 14.8% compared to the same time last year.
• Amusement and recreation-related construction spending was up 10.2% on a monthly basis and is up 39.2% from the same time last year.
• Communication-related construction spending fell 6.8% for the month, but is up 13.4% compared to June 2014.
• Construction spending in the transportation category grew 2.3% on a monthly basis and has expanded 9.6% on an annual basis.
• Sewage and waste disposal-related construction spending increased 1.6% for the month and has expanded 5.3% on a 12-month basis.
• Public safety-related construction spending grew 2.5% on a monthly basis, but is down 3.1% 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% for the month, but is up 2.1% on a year-over-year basis.
• Power-related construction spending fell 0.9 % for the month and has declined 16.5% from June 2014, the steepest decline for any nonresidential category.
• Commercial construction spending fell 4.3% in June, but is up 7.6% on a year-over-year basis.
• Healthcare-related construction spending fell 0.9% for the month, but is up 6.3% on a year-over-year basis.
• Manufacturing-related construction spending fell 0.8% in June, but is up 62.1% compared to June 2014.
• Office-related construction spending fell 1.1% in June, but is up 24.4% from the same time one year ago.
• Conservation and development-related construction spending fell 5.8% for the month, but is up 6.5% on a yearly basis.
• Religious spending fell 6.2 % for the month, but is up 5 % from the same time last year.