US Construction Spending Falls Again in June

After a modest rise in the US construction industry in May, spending fell again in June. However, while the month was down 0.6 percent compared to May, it was still up 3.3 percent from June the previous year. May's spending surge totalled 1.3 percent higher than the previous month.

Public construction, private non-residential building, and residential construction declined according to an analysis from the Associated General Contractors of America, accounting for the industry's overall dip to $884 billion. Officials from the association have urged Washington's lawmakers to prioritize investment in infrastructure for October's fiscal year.

According to chief economist of the association, Ken Simonson, "New single-family and multi-family construction both had rare slowdowns in June, while private nonresidential construction remained stuck in neutral as it has all year and the long slump in public construction worsened," adding that while private construction may well increase later in 2013, public spending is still struggling.

US Construction Spending Falls in June After Modest Rise in May

This might seem like a fairly gloomy outlook, particularly for public spending, but it is worth noting that despite the fall, June remains the second-highest rate since August 2009. Despite residential construction slowing down, activity is still up 18.1 percent in this area, compared to a year ago.

For non-residential construction, such as shopping centers, hotels and offices, June represented the first dip after four months of gain. Meanwhile, unemployment rate in the industry hit the lowest during a July for five years, down 9.1 percent. Some 767,000 workers who had last worked in construction were unemployed, down 227,000 from July the previous year.

However, even though unemployment in the industry has declined, many who were previously employed in construction had now left the sector for retirement, training programs or other jobs, according to Simonsen.

Association officials asserted that the dip in public building would only get worse unless Washington's policy makers can designate an increased budget into crucial infrastructure projects such as water and highway. This would also aid the much-needed construction hiring.

Image Copyright Till Krech (Courtesy Wikicommons)