US construction spending edges lower in June

Residential construction spending, at $939.8 billion in June, was off 0.4% month on month (m/m) but 7.5% higher y/y.

June spending on nonresidential construction projects was also marginally down vs. spending in May but was 5.5% higher when compared to June 2023.

Within the nonres category, spending was highest on manufacturing construction. Spending in this subcategory rose 0.1% m/m to $223.8 billion in June. Spending on commercial building, meanwhile, declined for a seventh consecutive month to $120.1 billion.

Commenting on June’s data, the Associated General Contractors of America (AGC) noted, “Although overall outlays fell for the second month in a row, there were enough bright spots to suggest construction will continue growing, on balance.”

Nonres categories to watch for, according to Ken Simonson, AGC’s chief economist, are data centers, manufacturing, and several infrastructure projects, which all saw increased spending.

Census figures show total construction spending has been rising notably in recent years (see Figure 1). Spending on residential projects has more or less leveled out over the past year after peaking in 2022. At the same time, spending on nonresidential projects has been surging in recent years.