Construction’s June spending edged up just 0.1% from May’s level, to a $1.065-billion annual rate, but posted a strong 12% gain year over year, the Commerce Dept. has reported.
Commerce’s U.S. Census Bureau said in its latest monthly construction spending report, released on Aug. 3, that the value of construction work put in place during the first six months of 2015 rose 8% from the same period last year.
Total residential spending in June increased a slight 0.4% from May and a robust 12% year over year.
Nonresidential work was flat compared with May’s level but gained 11.5% from June 2014’s mark. The figures are adjusted for seasonal differences.
Construction economists focused on the 12-month comparison. Ken Simonson, Associated General Contractors of America chief economist, said that the 12% year-over-year increase was the largest since March 2014, signaling that overall construction volume is picking up steam.
Anirban Basu, Associated Builders and Contractors chief economist, noted that nonresidential's 11.5% rise is the largest such increase in the January-June period since 2002, when the Census Bureau started reporting on construction spending. Basu added that the results also are "further proof of the recovery for nonresidential construction."
Among large nonresidential sectors, power declined 0.9% compared with May’s total, to $88.5 billion, and slumped 16.5% from its year-earlier level.
Educational projects dipped 0.2% from May, to $83.8 billion, and increased a modest 2.1% year over year.
Highway and street construction hit $91.5 billion in June, up 1.3% from May and a 14.8% jump from June 2014.
Office buildings were down 1.1% from May, to $55.4 billion, but surged 24.4% year over year.
For June, private construction slipped 0.5% from May’s totals but rose 13.7% from its year-earlier total. Public construction was up 1.6% compared with May and 8% from June 2014.
Simonson said, "Several of the private categories have risen especially fast," including offices and multifamily housing. But he cautioned, "Whether they can keep growing depends in part on companies being able to find enough skilled workers, a problem many contractors are already facing."