Construction spending declined for the fourth consecutive month in June as decreases in single-family, highway and educational projects outweighed increases in several private nonresidential categories, according to an analysis by the Associated General Contractors of America of government data released.
“Regrettably, the overall downward trend in spending is likely to continue and to spread to more project types as work that began before the pandemic hit finishes up,” Ken Simonson, the association’s chief economist, said in a statement “Unless the federal government invests heavily, and promptly, in infrastructure projects, both public and private nonresidential investment are likely to shrink further.”
Construction spending in June totaled $1.36 trillion at a seasonally adjusted annual rate, a decline of 0.7 percent from May and the lowest total in a year. After reaching a record high in February of $1.44 trillion, total spending has slumped by 6.0 percent, the steepest four-month contraction in a decade, the economist noted.
Private residential construction spending shrank by 1.5 percent in June as spending on single-family homebuilding plunged 3.6 percent to its lowest level since late 2016. In contrast, new multifamily construction spending climbed for the third month in a row, posting a 3.0 percent increase from May.