Residential Sector Continues to Buoy the Construction Spending

Total spending on construction slipped nationwide in July, down 0.6 percent from June to a seasonally adjusted annual rate of $1.21 trillion, but it remains 1.8 percent higher than the estimate for July 2016. The U.S. Census Bureau revised its estimate for June, originally reported at $1.21 trillion, to $1.22 trillion.

On a non-seasonally adjusted basis, spending during the month was $110.68 billion compared to $111.07 billion in June.  Year-to-date spending through the end of July was 4.7 percent higher than during the same period in 2016, $691.18 billion to $659.85 billion.

Privately funded construction was also lower in July than in June, down 0.4 percent.  The seasonally adjusted dollar number dipped to $945.5 billion annualized, from $949.4 billion (revised up from $940.72 billion) and is 4.1 percent higher than in July 2016.  On an unadjusted basis, spending year-to-date, is running 7.9 percent ahead of last year at $539.53 billion.

While its numbers are frequently offset by negative returns in the other construction sectors, residential construction spending continues to perk along.  Seasonally adjusted spending in July was $517,49 billion annualized, an 0.8 percent gain from June and up 11.6 percent year-over-year.  The only other private sector construction category to come close is "amusement and recreation," up 7.7 percent.

On a non-adjusted basis, residential spending during the month was $48.44 billion, $24.36 billion of which was for new single-family construction.  Single family spending is up 8.0 percent for the year to date at $145.94 billion and multifamily spending, at $36.23 billion, is 5.1 percent higher than during the same period in 2016. Overall residential spending through the end of July, which includes residential remodeling and repairs as well as new construction, is running 11.9 percent ahead of 2016.

Public sector spending was at an annual rate of $266.0 billion, down 1.4 percent from June and 5.6 percent from the same month in 2016. Year to date spending is 5.1 percent below last year's pace.