Lee Fehrenbacher//August 2, 2012//
Construction spending increased yet again in June, bringing a positive end to the first half of 2012.
The U.S. Department of Commerce reported on Wednesday that construction spending rose 0.4 percent above May and 7 percent above June 2011 to a seasonally adjusted annual rate of $842.1 billion. Combined, the first six months of spending accounted for $387.1 billion – a 9 percent increase over the same period in 2011.
According to the Associated General Contractors, June’s numbers are the highest in two and a half years. Ken Simonson, AGC’s chief economist, said June’s report showed improvement in a wide range of residential and nonresidential categories of construction and that upward revisions to the May and April totals reinforced notions that private construction is growing consistently.
In June, private construction spending rose 7 percent over May to $567.9 billion. Nonresidential increased only slightly to $302.3 billion – 0.1 percent above May, but residential spending saw healthy gains, increasing 1.3 percent to $262.1 billion. Within that category, multifamily construction increased 3.4 percent over May and a whopping 49 percent over June 2011, while single family spending grew 3 percent and 19 percent, respectively, according to the AGC.
Public construction stayed flat, increasing from $274.1 billion to $274.2 billion – 3.7 percent below June 2011 levels. Highway construction also increased slightly, rising 1.5 percent to $80.4 billion. Education spending, however, dropped 1.4 percent to $65.7 billion.
Simonson said he expects construction spending overall to remain positive throughout 2012 because of gains in private nonresidential and multifamily projects. If this year proves to be positive, it will be the first since 2007, he said.