US construction spending drops for fourth month in June

US construction spending fell slightly more than expected in the month of June after four consecutive months of contraction, but is still up 0.1% over June 2019 estimates, according to a report from the US Commerce Department.

Construction spending during June 2020 was estimated at a seasonally adjusted annual rate of $1,355 billion, 0.7% below the revised May estimate of US$1,365 billion.

The June figure is 0.1% above the June 2019 estimate of US$1,354 billion.

The Commerce Department reports that during the first six months of this year, construction spending amounted to US$668 billion, 5% above the US$636 billion estimate for the same period in 2019.

According to a report from Nasdaq.com, construction tumbled by 1.7% to a revised rate of $1.365 trillion in May. Economists had expected June construction spending to decrease by 0.5% compared to the 2.1 percent slump originally reported for the previous month.

The construction industry has suffered as a result of shutdowns caused by the coronavirus pandemic. As cases rise again in some parts of the country, there are new concerns about further building declines in the coming months, states a report from Finance & Commerce.

The Commerce Department’s latest report states highway construction plunged by 1.7% to a rate of US$102.6 billion in June. Spending on public construction decreased by 0.7% to an annual rate of US$353.3 billion in June from the revised May estimate of US$355.8 billion.

Meanwhile, spending on private construction fell by 0.7% to an annual rate of US$1.002 trillion in June from the revised May estimate of US$1.009 trillion.

Residential construction spending tumbled by 1.5% to a rate of US$534.2 billion in June, led by a 3.6% drop in single-family home projects, which was somewhat offset by a 3% rise in multi-family home construction, reports say.

Nonresidential construction rose 0.2% to US$467.7 billion in June from the revised May estimate of US$466.9 billion. This was led by increases in hospitals and clinics, manufacturing facilities and hotels.

Educational construction spending plunged by 2.7% to a rate of US$85.8 billion.

The first impacts of the pandemic on US construction spending showed up in the US Census Bureau’s data for March, showing that although total spending put in place increased 0.9% at a seasonally adjusted annual rate from February, and 4.7% from March 2019, the increase was concentrated in the volatile residential improvements segment, which jumped by US$17 billion (10%) over the month.