​According to the Commerce Department, total construction spending plunged by $15.8 billion, or 1.3%, in June to $1.21 trillion, widely missing the consensus forecast of a 0.5% increase. This follows a 0.3% increase in May that was revised up from no change. Compared to a year ago, spending was up just 1.6%, the least since November 2011. 

Weakness was widespread in June. Residential spending fell by $1.4 billion, or 0.3%, from the prior month but was up 9.0% from the prior year. Non-residential spending plunged by $14.4 billion, or 2.0%, and was down 3.1% from the prior year, the worst in four years.

For non-residential spending, only two of fifteen categories saw spending increases. Spending on office projects rose by $1.4 billion, or 1.9%, and spending on communications projects rose by $612 million, or 2.8%. Every other category saw spending fall, led by a huge $5.7 billion, or 6.4%, decline in spending on highways and streets, which took the level of spending down to the lowest in over three years. Other notable declines were a $3.9 billion, or 4.3%, decline in education spending and a $1.2 billion, or 1.8%, decline in manufacturing. The biggest percentage declines came in conservation and development, where spending dropped 7.3%, and public safety, where spending fell 6.5% from the prior month.                 

​Private spending only fell by $573 million, or 0.1%, with all of the decline coming from residential projects. Although non-residential spending rose by $503 million, or 0.1%, that included a $1.8 billion, or 2.9%, increase in spending on office projects and a $1.3 billion, or 1.9%, decrease in manufacturing. Meanwhile, public spending cratered by $15.2 billion, or 5.4%, half of which came from just two categories, with highway and street projects falling by $5.8 billion, or 6.6%, and education spending dropping by $3.9 billion, or 5.5%. Thus, 94% of the drop in total  spending came from public non-residential projects.  

Compared to a year ago, the strongest growth in total construction spending has come from residential, office and commercial projects. Conversely, the biggest declines have been seen in conservation/development, sewage and waste disposal and water supply.

​Last week the Federal Reserve held the Fed Funds rate steady. Today’s very weak report suggests that was a wise move. With inflation slowing, Treasury yields and mortgage rates have been trending down, which should help to support the construction industry. 

​According to the Commerce Department, total construction spending fell by $287 million, or 0.02%, in May to $1.23 trillion, widely missing the consensus forecast of a 0.5% increase. This follows a 0.7% drop in April that was revised up from a 1.4% decline. Compared to a year ago, spending was up 4.5%, less than April’s 5.5% pace and the slowest since August.

May was one of those rare months when public and non-residential spending rose while private and residential spending fell. While residential spending dropped by $2.5 billion, or 0.5%, from the prior month, non-residential spending increased by $2.3 billion, or 0.3%. These measures were up 10.9% and 0.3% compared to a year ago, respectively.

Non-residential spending growth was led by educational facilities, which rose by $2.6 billion, or 2.8%. Office projects saw a $1.1 billion, or 1.6%, increase in spending. Power projects came in third, spending on which rose $702 million, or 0.7%. Conservation and development and religious projects both saw a 3.7% increase in spending, tied for the largest increase on a percentage basis. The biggest decline in non-residential spending was in manufacturing, which fell by $1.2 billion, or 1.7%. Highway and street projects saw an $876 million, or 1.0%, decline, while commercial spending dropped by $552 million, or 0.7%. The biggest percentage decline came in communications, where spending fell 1.9%. Transportation spending also fell by 1.2%.               

​Private spending plunged by $6.1 billion, or 0.6%, half of which came from residential projects, where the $3.1 billion decline was the largest in nearly three years. On the non-residential side, weakness was seen in manufacturing, which fell by $1.2 billion, and educational facilities, which dropped by $1.0 billion. Meanwhile, public spending rose by $5.9 billion, or 2.1%, driven largely by a big $3.6 billion increase in spending on educational facilities, the most in nearly a year. 

Compared to a year ago, the strongest growth in total construction spending has come from residential, office and commercial projects. Conversely, the biggest declines have been seen in sewage and waste disposal, conservation/development and manufacturing.

​The residential sector of the U.S. economy has been a pillar of strength over the last several years. Thus, the recent spike in interest rates amid talk of the Fed shrinking its balance sheet is cause for concern, for the construction industry and the overall economy. 

​According to the Commerce Department, total construction spending plunged by $17.0 billion, or 1.4%, in April to $1.218 trillion, but remained above the peak reached before the recession. Compared to a year ago, spending was up 6.7%, a noticeable improvement from March’s 5.0% rate of growth, but this was only because the previous April was very weak, making the year-over-year comparison much more favorable. 

Unlike in months past, in April both residential and non-residential spending fell. While residential spending dropped by $4.7 billion, or 0.9%, from the prior month, non-residential spending plunged by $12.3 billion, or 1.7%. These measures were up 15.6% and 0.8% compared to a year ago, respectively.

There was only one kernel of strength in non-residential spending, which came from a $263 million, or 2.4%, increase in spending on water supply projects. The only other positive was a meager $8.0 million increase in office buildings. Weakness was widespread, led by a $3.5 billion decline in highways and streets, a $2.1 billion drop in power projects and a $1.5 billion decline in educational facilities.               

​Also unlike past months, both private and public spending declined. Private spending fell by $6.4 billion, split nearly evenly between residential and non-residential spending,. Public construction plunged by $10.6 billion, driven almost entirely by non-residential spending. Weakness in private non-residential spending was led by a $1.3 billion decline in manufacturing and a $1.3 billion drop in power projects. The only real strength was a $1.1 billion increase in office buildings. On the public side, the weakness was led by a $3.4 billion plunge in highways and streets. Public non-residential spending accounted for over half of the drop in total construction spending. 

Compared to a year ago, the strongest growth in total construction spending has come from residential, office and commercial projects. Conversely, the biggest declines have been seen in sewage and waste disposal, religious facilities and conservation projects.

​The residential sector of the U.S. economy has been a pillar of strength over the last several years. This has helped to soften the blow from weaker government spending during the same period. Despite falling interest rates, housing activity was quite weak in April. This is a concern for the economy, and along with slowing inflation, just may lead the Fed to hold rates steady at its June FOMC meeting.          

​According to the Commerce Department, total construction spending fell by $2.5 billion, or 0.2%, in March to $1.22 trillion, but remained above the peak reached before the recession. Compared to a year ago, spending was up just 3.6%, a noticeable slowdown from February’s 5.4% rate of growth and on the lower end of the growth range seen during the last couple of years. 

There was a noticeable difference in spending between the residential and non-residential sectors. While residential spending rose by $5.9 billion, or 1.2%, from the prior month, non-residential spending plunged by $8.4 billion, or 1.2%. These measures were up 7.3% and 1.0% compared to a year ago, respectively.

Non-residential spending strength was led by a $693 million increase in spending on healthcare facilities, a $436 million increase in manufacturing and a $402 million increase in highways and streets. Weakness was led by a $3.2 billion plunge in educational facilities, a $2.8 billion drop in commercial buildings and a $1.9 billion decline in office buildings.               

There was also a noticeable difference between private and public spending. Private spending rose by $126 million, driven almost exclusively by residential projects. Non-residential spending fell by $5.9 billion and the weakness was fairly widespread. In contrast, public spending fell by $2.6 billion, almost all of which came in the non-residential category.  Public spending on non-residential projects fell by $2.5 billion, driven largely by a $1.4 billion pullback in spending on educational facilities and a $1.2 billion decline in transportation.

Compared to a year ago, the strongest growth in total construction spending has come from communications, office and commercial projects. Conversely, the biggest declines have been seen in sewage and waste disposal, water supply and transportation projects.

​The residential sector of the U.S. economy has been a pillar of strength over the last several years. This has helped to soften the blow from weaker government spending during the same period. Even so, the pace of residential spending growth is down from a peak of nearly 23% year-over-year two years ago to just 7.3% in March. Following very weak economic growth in the first quarter and a decline in the consumer price index in March, the Federal Reserve held interest rates steady at today’s FOMC meeting. This should help to keep residential spending strong.

​According to the Commerce Department, total construction spending rose by $9.0 billion, or 0.8%, in February to $1.19 trillion, very close to the peak seen before the recession. Compared to a year ago, spending was up just 3.0%, on the lower end of the range seen during the last couple of years.  

There was a noticeable difference in spending between residential and non-residential spending. While residential spending rose $8.7 billion, or 1.8%, from the prior month, non-residential spending inched up by just $237 million, or 0.03%. These measures were up 6.2% and 1.0% compared to a year ago, respectively. Thus, residential spending accounted for virtually all of the spending growth in February.

Non-residential spending strength was led by a $1.9 billion increase in spending on power, a $1.2 billion increase in highways and streets and a $847 million increase in amusement and recreation. Weakness was led by a $1.8 billion decline in spending on communications, a $1.2 billion drop in manufacturing and a $792 million decline in healthcare.               

There was also a noticeable difference between private and public spending. Private spending rose by $7.3 billion, driven exclusively by residential projects. Non-residential spending fell by $1.2 billion, but within that was a $2.6 billion increase in spending on power projects. In contrast, public spending only increased by $1.6 billion, almost all of which came in the non-residential category.  Public spending on non-residential projects rose by $1.4 billion, driven largely by a $1.1 billion increase in spending on highways and streets.

​Compared to a year ago, the strongest growth in total construction spending has come from lodging, office and commercial projects. Conversely, the biggest declines have been seen in sewage and waste disposal, conservation and development and water supply projects.

​The residential sector of the U.S. economy has been a pillar of strength over the last several years. This has helped to soften the blow from weaker government spending during the same period. Even so, the pace of residential spending growth is down from a peak of nearly 23% year-over-year two years ago to just 6.2% in February. With inflation become a bit more of a concern, the Fed is primed to raise interest rates further. If this results in higher mortgage rates, residential spending could soften, meaning spending on other projects would need to fill the void.

​According to the Commerce Department, total construction spending fell by $11.8 billion, or 1.0%, in January to $1.18 trillion, although spending was still very close to the peak seen before the recession. Compared to a year ago, spending was up just 3.1%, on the lower end of the range of the last couple years.  

There was a noticeable difference in spending between residential and non-residential spending. While residential spending rose $1.4 billion, or 0.3%, from the prior month, non-residential spending plunged by $13.2 billion, or 1.9%. These measures were up 5.5% and 1.5% compared to a year ago, respectively.

Non-residential spending weakness was led by a $2.9 billion decline in spending on highways and streets, a $2.7 billion drop in transportation and a $2.3 billion decline in education. The only real bright spots were a $1.5 billion increase in spending on power and a $354 million increase in manufacturing.

​There was also a noticeable difference between private and public spending. Private spending rose by $2.3 billion, driven exclusively by residential projects. Non-residential spending fell by $139 million, but within that was a $1.2 billion increase in spending on power and a $402 million increase in manufacturing. In contrast, public spending plunged by $14.1 billion, almost all of which came in the non-residential category.  Public spending on highways and streets fell by $2.9 billion, transportation spending dropped by $2.5 billion and spending on education declined by $1.9 billion. The only real strength in the public sector came from spending on power and amusement and recreation projects.

Compared to a year ago, the strongest growth in total construction spending has come from lodging, office and commercial projects. On the flip side, the biggest declines have been seen in sewage and waste disposal, transportation and public safety projects.

​The residential sector of the U.S. economy has been a pillar of strength over the last several years. This has helped to soften the blow from weaker government spending during the same period. Even so, the pace of residential spending growth has slowed from a peak of nearly 23% year-over-year two years ago to just 5.5% in January. With mortgage rates on the rise and home price growth slowing, we may be near the peak of this housing cycle. Spending on other projects will need to fill the void to support the economy if residential spending softens.