ConDig (03-Aug-20). Construction spending edged down 0.7% in June to a seasonally adjusted annual rate of $1.36 trillion, according to latest figures from the Commerce Department.
The fall was the fourth straight monthly drop following the Covid-19-driven economic shutdown.
Spending in May was revised to a 1.7% fall from the prior estimate of a 2.1% drop to $1.37 trillion.
Residential construction tumbled 1.5% in June, while spending on public construction projects fell 0.7%.
Private nonresidential construction spending increased by 0.2% in June, but public nonresidential spending fell 0.8%. Nonresidential construction spending was up 0.4% since June last year, led by the public safety, water supply and power categories.
Despite the four monthly declines driven by the impact from the pandemic, total spending for the year-to-date was up 0.1% compared with the same six month period last year.
“The stability of nonresidential construction is remarkable,” said Associated Builders and Contractors chief economist Anirban Basu.
“While gross domestic product crumbled during the second quarter, nonresidential construction spending held its own, partially due to its status as an essential industry in most cities and states. And while many contractors reported that they sustained project interruptions during the second quarter—the worst economic quarter on record—the nation’s nonresidential construction sector was still able to put roughly as much construction in place as in June 2019.”
But the industry’s future remains perilous amid murky economic fundamentals, Basu added.
At the end of last month, latest figures from Dodge Data & Analytics showed that US construction starts collapsed 22% in the first half of this year compared with the year-ago period due to the economic shutdown.