Nonresidential construction spending accelerated in June, according to AGC economist
"Construction spending rebounded in June after a tiny drop in May and a small increase in April," Ken Simonson, chief economist for The Associated General Contractors of America (AGC), said. Simonson was commenting on an August 1 report from the Census Bureau that showed the value of construction put in place rose at a seasonally adjusted annual rate of 0.3% in June, following a drop of less than 0.1% in May, and a gain of 0.2% in April.
"In all three months, private residential construction dropped sharply - 1.0% in June - while private nonresidential and public construction spending increased," Simonson observed. "In June, these categories rose 2.7 and 0.8% respectively. I expect those trends to continue: falling residential spending, very strong private nonresidential and somewhat positive public spending. The 'top line' number will depend on which sector has the biggest change each month. "There are many areas of strength on the private nonresidential side," Simonson added. "For instance, manufacturing spending surged 8% for the month and 24% in the first half of 2006 compared to January-June 2005.