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News July 2, 2024

Construction spending fell in May

Nonresidential construction spending decreased 0.1% from April to May but is up 6.2% compared with May 2023, according to Associated Builders and Contractors.

For public construction, spending increased 0.4% for the month and is up 9.6% year to date. Private nonresidential spending fell 0.3% from April to May and is up 4.1% year to date. Spending was down for the month in nine of the 16 nonresidential subcategories.

“Nonresidential construction spending has fallen for two consecutive months yet remains just 0.2% below the all-time high achieved in March 2024,” said ABC Chief Economist Anirban Basu. “Much of that progress is attributable to ongoing infrastructure investments, which spurred a sizable 0.4% increase in publicly funded nonresidential spending in May.

“Private nonresidential spending has lagged and, after falling 0.3% in May, is up just 4.1% year over year,” Basu continued. “That weakness can be tied to interest rate-sensitive segments like office and commercial, both of which have also been hampered by altered demand dynamics in the wake of the pandemic. Despite this recent private sector moderation, contractors remain confident about the next few quarters, with a majority expecting their sales to increase over the next six months, according to ABC’s Construction Confidence Index.”

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