Construction spending dips
In a sign that the nation’s economic recovery continues to stumble, private nonresidential construction spending decreased 0.6 percent in May, according to the July 1 report by the U.S. Census Bureau. On a year-over-year basis, private nonresidential construction spending is down 24.8 percent. Total nonresidential construction spending, which includes both private and public, slipped 0.1 percent from last month and 15.2 percent from May 2009, and now stands at $571.7 billion.
Eight of the 16 nonresidential construction subsectors increased spending for the month, including water supply, up 5.5 percent; religious-related construction, up 4.2 percent; and highway/street construction, up 2.7 percent. Five subsectors reported higher construction spending compared to May 2009, including conservation and development, up 23 percent; transportation, up 13.8 percent; and highway/street construction, up 5.6 percent.
In contrast, those subsectors that had decreases in construction spending in May include lodging, down 3.9 percent; amusement and recreation, down 2.5 percent; and transportation, down 2.3 percent. On a year-over-year basis, lodging is down 62.1 percent, office construction is down 33.8 percent, commercial construction is down 31.8 percent, and manufacturing is down 31.4 percent.
Overall, total construction spending, including both residential and nonresidential, was down 0.2 percent from April 2010 and n 8 percent from May 2009.
“One could view (this) release as positive news,” said Associated Builders and Contractors Chief Economist Anirban Basu, in a news release. “The level of construction spending in May hardly changed from the prior month, and April represented an improvement over March. However, for the most part, today's report should be viewed as further indication that the U.S. economic recovery continues to stall.
“Construction spending growth, to the extent that it exists, continues to be the domain of publicly financed projects, particularly those attached to the stimulus package passed in February 2009,” said Basu. “This is clearly apparent in the list of subsectors that continue to register year-over-year growth, such as conservation and development, transportation and highway/street.”