by Peter Grist
Private residential construction spending turned back down in July following three consecutive monthly increases. The Bureau of Census Construction Spending report revealed a 1.4% decrease in private residential construction spending in July, to a seasonally adjusted annual rate of $248.1 billion. Year-over-year, residential construction spending is up 5.3% from $235.6 billion in July 2010.
Single-family construction spending again showed little change, up 0.1% to 105.1 million in July. This flat trend in single-family construction spending is consistent with the trend in housing starts, which has struggled to gain any forward momentum over the past 12 months and remains at a very low level. Multifamily construction spending rose 1.4% to $14.0 billion, recovering most of the ground lost the previous month. Multifamily construction spending has followed the general trend in multifamily starts, which, although very volatile, have moved upward since the beginning of 2011. Year-over-year, single-family and multifamily construction spending are down 8.4% and 6.0% respectively.
Spending on home improvements has fluctuated widely over the past year, driving the shifts in private residential construction spending. July was no exception. Home improvement spending dropped 2.9% in July to $129.1 billion. This ended a series of monthly increases that saw spending on home improvements rise 23.2% between March and June 2011. Overall, home improvement spending has made a solid gain over the past year, up 21.8% from $105.9 billion in July 2010.
Total private construction spending was down 0.9% to $514.5 billion, from $519.0 billion in June, with a 0.4% decline in private non-residential construction spending adding to the 1.4% decline in private residential construction spending. The decrease in non-residential construction expenditure was led by a notable (-6.0%) reduction in spending on manufacturing construction. Government construction expenditures continued to decline, down a further 2.1% in July, with most major sectors experienced a decline—the largest decreases in spending on power (-5.7), educational (-4.3%), healthcare (-3.7%) and transportation (-2.2%) construction expenditures.
Overall, total construction spending was down 1.3% to $789.5 billion in July.