Nonresidential construction spending decreased 0.2% from June to July but is up 5.9% compared with July 2023, according to Associated Builders and Contractors.
For public construction, spending increased 0.2% for the month and is up 8.2% year to date. Private nonresidential spending fell 0.4% from June to July and is up 4.5% year to date. Spending was down for the month in 11 of the 16 nonresidential subcategories.
“While Hurricane Beryl, which interrupted construction activity along the Gulf Coast in early July, contributed to the month’s weak construction spending data, the cumulative effect of high interest rates likely bears more blame,” said ABC Chief Economist Anirban Basu. “This is particularly true for nonresidential spending in the private sector, which fell 0.4% for the month and is up just 4.5% over the past year.
“Less than half of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, a clear indication that the industry is eagerly awaiting lower interest rates,” Basu continued. “Fortunately, it’s all but certain that the Federal Reserve will begin lowering rates at its September meeting. The remaining question is whether it will be a 25- or 50-basis point cut.”
