U.S. construction spending falls in June on decline in residential private construction spending
U.S. construction spending dropped in the month of June on fall in residential private construction spending. On a month-on-month basis, construction spending fell 0.7 percent, as compared with consensus expectations of a rebound of 1 percent. Momentum in both residential and non-residential activity continued to fall after the sharp downturn in April. However, the rate of fall has eased a bit.
“Overall, the drop in construction spending in early Q2 appears to be more muted compared with that of other activity indicators such as retail sales, industrial production or even housing starts and existing home sales. Nevertheless, the data are consistent with the sharp contraction in residential investment reported in the BEA's advance Q2 GDP report last week”, stated Barclays in a research report.
Delving into details, most of the fall was driven by a fall in private residential construction spending. Non-residential construction in the private sector also dropped, but modestly. Public sector construction spending dropped 0.7 percent in the month, following a brief recovery in May, driven by the non-residential sector.