Census Bureau: Construction spending falls in July

WASHINGTON – Construction spending nationwide fell 0.4 percent in July to a seasonally adjusted rate of $1.17 trillion per year, after rising a revised 0.1 percent in June, according to a report today by the U.S. Department of Commerce’s Bureau of the Census. Compared with July 2006, spending fell 2.0 percent.
The level was below the mean prediction from a survey of 54 economists by Bloomberg News, whose forecast was for spending to remain unchanged in July after the 0.3-percent decline originally reported for June.
Private construction fell 0.7 percent, to a rate of $880 billion per year in July, declining 0.7 percent from the revised June estimate of $886 billion, the Census Bureau said. Residential construction fell 1.4 percent from its June level to $543 billion per year, outweighing nonresidential building’s 0.4-percent decline to $346 billion per year.
Compared with July 2006, private construction fell 6.0 percent as residential construction plunged 16.1 percent while nonresidential construction rose 15.4 percent.
Public construction spending rose in July to $289 billion or 0.7 percent above the revised June estimate, the bureau said. Educational construction surged 1.9 percent to $83.0 billion, outweighing highway construction’s 0.8-percent decline to $74.3 billion.
Compared with July 2006, public construction surged 12.7 percent, as increases in spending on power (up 53.3 percent), public safety (40.2 percent), residential (39.9 percent) and office (24.3) projects outweighed the 0.3-percent decline in street and highway construction.
For the first seven months of the year, public and private construction spending totaled $658 billion, a 3.4-percent decline from the same period of 2006, the Census Bureau said.
“We’re going to see another leg down, mostly because of the pain the big builders are taking,” Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, told Bloomberg News. “The full effects of the market volatility really haven’t found their way into housing yet. The August declines may be even bigger.”
Additional information, including the four-page July construction-spending release, is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov/constructionspending.