Housing is the Only Game in Town For Construction Spending

June was yet another month when the only bright spot in the U.S. Census Bureau's construction spending report was provided by the residential sector. Literally the ONLY bright spot.

Total spending during the month on all construction was at a seasonally adjusted annual rate of $1.552 trillion, 0.1 percent higher than the rate in May and 8.2 percent higher than June 2021 spending. All 17 non-residential categories of construction posted year-over-year losses, ranging from fractional percentages to a 37.4 percent downturn in public safety spending and -26.6 percent for Lodging. Three other categories had double digit declines. Only nine of the 17 were unchanged or higher on a monthly basis and only two of the smallest had gains over 1.0 percent.

On an unadjusted basis, spending for the month was up from $132.682 billion in May to $140.486 billion and for the year-to-date (YTD) it has risen 5.4 percent from spending during the first six months of 2020 to $736.486 billion.

In the private sector, where almost all residential spending takes place, total expenditures for the month were at a seasonally adjusted annual rate of $1.215 trillion of which $763.403 billion was housing related, an increase of 1.1 percent for the month and 29.3 percent year-over-year. The residential number accounted for all of the annual increase in construction spending which was 13.5 percent higher than a year earlier. No other private sector construction category was in the black for the year and only one posted an increase for the month, 0.1 percent for communications related construction.

Non-adjusted private sector spending for the month was $108.067 billion compared to $103.091 billion the previous month. YTD there has been 578.611 billion spent in the private sector, 9.4 percent growth over the same period last year.

Single-family construction consumed $411.798 billion on a seasonally adjusted annual basis in June, a 1.8 percent monthly gain and up 29.3 percent year-over-year. Multifamily spending was flat for the month at a seasonally adjusted $99.091 annual rate, up 19.7 percent compared to the prior June.

On a non-adjusted basis, total residential spending was $69.238 billion in June, about $4.3 billion more than the previous month. Construction of single-family houses consumed $36.029 billion compared to $34.927 billion in May, and multifamily construction rose by about $1.5 billion to $8.529 billion.

YTD, total residential spending rose 24.9 percent to $356.483 billion and single family and multifamily were up 36.5 percent and 19.5 percent. Those YTD totals are $187.715 billion and $48.353 billion, respectively.

Public sector residential spending slowed from what had been, given the size of the market, a boom that started in 2019. While up 0.8 percent from May at $8.942 billion annualized, it has now fallen behind its year earlier figure by 3.0 percent. YTD spending, at $4.313 billion, is down 0.6 percent from the first six months of 2021.