The value of all construction put in place in the U.S. in July remained unchanged after June data was revised sharply upward (+1.8%). The U.S. Census Bureau of the Department of Commerce estimates July spending at $1,153.2 billion.
July data on private nonresidential construction reveals a much more positive trend going into the third quarter.
Private construction outlays rose 1.0% for the month to $875.0 million and are 4.4% above July of 2015. A 4.6% jump in office construction lead the private-sector charge, followed closely by a 3.9% rise in manufacturing construction. But July office building is a whopping 30.3% higher than the same period last year, while manufacturing has dropped 5.1% over 12 months.
Private commercial construction grew just 1.2% in July, but stands 13.5% above July of 2015.
The average of monthly private-construction spending estimates since the first of the year is 8.2% greater than that of the first seven months of 2015.
Public-sector spending tumbled 3.7% in July to $278.2 million, and is 6.5% below the July 2015 reading. The drop in public construction spending reflects tighter state and local budgets and cuts in federal reimbursements. Wells Fargo’s Economics Group expects the continued slide in public construction outlays will likely result in scaled-back estimates for government spending in the third quarter.
The average of monthly public-construction spending estimates year to date is 1.4% above that of the first seven months of 2015.
“Residential construction spending still looks inexplicably weak compared to construction employment and housing starts,” according to Wells Fargo’s analysis of monthly Commerce Department figures.
