According to the U.S. Census Bureau, construction spending during June 2024 was estimated at a seasonally adjusted annual rate of $2,148.4 billion, 0.3% (±1.0%) below the revised May estimate of $2,154.8 billion. The June figure is 6.2% (±1.6%) above the June 2023 estimate of $2,023.0 billion. During the first six months of this year, construction spending amounted to $1,034.8 billion, 8.6% (±1.2%) above the $952.5 billion for the same period in 2023.
In June, the estimated seasonally adjusted annual rate of public construction spending was $483.9 billion, 0.4% (±1.8%) below the revised May estimate of $486.0 billion. Educational construction was at a seasonally adjusted annual rate of $101.9 billion, 0.9% (±3.3%) below the revised May estimate of $102.8 billion. Highway construction was at a seasonally adjusted annual rate of $143.5 billion, 0.4% (±4.6%) below the revised May estimate of $144.1 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,664.6 billion, 0.3% (±0.8%) below the revised May estimate of $1,668.8 billion. Residential construction was at a seasonally adjusted annual rate of $928.0 billion in June, 0.3% (±1.3%) below the revised May estimate of $931.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $736.6 billion in June, 0.1% (±0.8%) below the revised May estimate of $737.7 billion.
“Although overall outlays fell for the second month in a row, there were enough bright spots to suggest construction will continue growing, on balance,” said Associated General Contractors of America Chief Economist Ken Simonson. “In particular, data centers, manufacturing and several infrastructure segments are expanding.” Association officials noted that many state and local officials remain concerned about their ability to comply with the Biden administration’s new Build America Buy America requirements. Those new rules make it very difficult for projects to move forward when any components are not available domestically, which happens frequently.
“A new trend in nonresidential construction is emerging, and it’s not a good thing,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Despite a bevy of megaprojects in certain parts of the nation, overall nonresidential construction spending appears to have entered a period of stagnation. The flattening of momentum has been apparent for the better part of a year, but the impact of higher interest rates, tighter credit conditions and a softening economy is increasingly apparent in the most recent data, which indicate that aggregate nonresidential construction spending is in decline.
“Despite a recent loss in spending growth momentum, many contractors remain upbeat according to ABC’s Construction Confidence Index, anticipating growth in revenues and payrolls over the next six months,” said Basu. “But with interest rates staying higher for longer, it appears that many projects are being put on hold, limiting construction starts, suppressing backlog and perhaps eventually eroding current contractor confidence.”
