Construction Spending Largely Unchanged as Shutdowns End

Construction spending held firm in June, inching down fractionally from the May level and increasing a bit compared to June 2019. The U.S. Census Bureau said total spending during the month was at a seasonally adjusted annual rate of $1.355 trillion, down 0.7 percent from the $1.365 trillion spending rate in May. On an annual basis the rate was up 0.1 percent.

On an unadjusted basis there was $123.377 billion spent compared to $117.226 billion the prior month. Spending for the first six months of the year was up 5.0 percent from the same period in 2019 at $667.920 billion.

Privately funded construction expenditures were also down 0.7 percent month-over-month at a rate of $1.002 trillion compared to $1.009 trillion in May. The June rate was 1.9 percent lower on an annual basis.

Private residential spending declined 1.5 percent to $553.170 billion and was 0.8 percent below the rate in June 2019. Single-family construction fell 3.6 percent and 7.6 percent from the two earlier periods at a rate of $252.624 billion. Multi-family construction picked up some of the slack, rising 3.0 percent from May to $80.022 billion, but it was 2.1 percent lower than a year earlier.

Private spending is holding up well, however, on an unadjusted basis. There was a total of $89.383 billion spent in June compared to $86.889 billion in May and for the year-to-date (YTD), spending increased 4.5 percent to $507.046 billion.

The same is true of the unadjusted residential component. Spending there was up from $47.538 in May to $49.160. Single-family spending grew only slightly, from $22.483 billion to $22.539 billion while new multifamily construction consumed $6.971 billion, about $300 million more than the prior month. The census report does not break out expenditures on remodeling, but anecdotal reports indicate that sector has been unusually active due to retrofitting for working at home and may account for some of the $20 billion difference between new construction and total residential spending.

Spending YTD on residential construction is up 7.5 percent from the same period last year to $272.727 billion. New single-family construction spending rose 3.9 percent while multifamily spending was down 2.5 percent. Spending on the two components during the first six months totaled $134.076 billion and $39.748 billion, respectively.

Public spending in June also declined by 0.7 percent but was up 6.2 percent year-over-year at $353.300 billion. Residential spending rose 2.7 percent to $8.137 billion, putting it 34.1 percent higher than in June 2019. Public spending on all construction thus far in 2020 totals $160.874 billion, a 6.6 percent increase over 2019. Residential spending YTD is up 30.7 percent to $3.756 billion.