Weakening Housing Activity Seeing Construction Spending Contract

May saw total construction spending fall in the U.S. 1% month-over-month in May (consensus was expecting a gain of 0.4%). The fall was more dramatic when you consider an upwardly revised 0.8% increase (from 0.2%) in April. Housing starts were down -14.4% month-over-month in May. This month the weak levels of public construction spending were not offset by private residential spending with the weakening housing starts activity. On a year-over-year basis, total construction spending was up 9.7%.

Beazer Homes Under Construction
Residential Housing Construction June 2022

May 2022 Total Construction Spending Highlights

  • Total construction spending declined 0.1% month-over-month in May (consensus 0.4%) following an upwardly revised 0.8% increase (from 0.2%) in April.
  • Total private construction was flat month-over-month
  • Total public construction decreased 0.8%.
  • On a year-over-year basis, total construction spending was up 9.7%.
United States Construction Spending
  • Total residential spending rose 0.2% month-over-month and was up 18.7% year-over-year
  • Total nonresidential spending decreased 0.6% and was up just 1.0% year-over-year.
  • The increase in private construction spending was paced by a 0.2% increase in residential spending.
  • Nonresidential private spending decreased 0.4%, led by a 1.1% decline in power spending and a 0.9% decline in commercial spending.
  • The decrease in public construction was driven by a 0.8% decrease in nonresidential spending, which was led by a 2.3% decline in highway and street spending.
  • Public residential construction spending decreased 0.7%.

Source: Census

From The TradersCommunity News Desk