Photo: Calculated Risk
Overall construction spending increased slightly in June, and private construction spending, both residential and non-residential, decreased in June.Click on graph for larger image in new window.
This graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.
Residential spending is now 62% below the peak of early 2006.
Private non-residential construction was revised down for both April and May, and spending is now 35% below the peak of late 2008.
From the Census Bureau: June 2010 Construction at $836.0 Billion Annual Rate
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2010 was estimated at a seasonally adjusted annual rate of $836.0 billion, 0.1 per cent (±1.6%)* above the revised May estimate of $834.8 billion.
Spending on private construction was at a seasonally adjusted annual rate of $527.6 billion, 0.6 per cent (±1.3%)* below the revised May estimate of $530.9 billion. Residential construction was at a seasonally adjusted annual rate of $258.3 billion in June, 0.8 per cent (±1.3%)* below the revised May estimate of $260.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $269.3 billion in June, 0.5 per cent (±1.3%)* below the revised May estimate of $270.6 billion.
Private residential construction spending will decline sharply in July since builders rushed to complete homes in June (because of the tax credit).
Private non-residential investment in structures will be revised down in the Q2 GDP report. The advance GDP report showed an increase in non-residential investment in structures of 5.2% (SAAR) and a positive contribution to GDP of 0.14 percentage points. This will probably be revised away.
Based on the Architecture Billings Index, non-residential spending will decline further in 2010 – and into 2011. Residential spending will probably exceed non-residential later this year (or early 2011), but that will be mostly because of weakness in non-residential construction, as opposed to any significant increases in residential spending.
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