Construction Spending Up 9% in First Six Months of 2012

Spending on construction rose 9% year-over-year in the first six months of 2012, according to the latest data from the U.S. Census Bureau. In June, spending rose to a seasonally adjusted annual rate of $842.1 billion, up 0.4% from the revised May figure and up 7% year-over-year.

Private construction rose 0.7% month-over-month in June and residential construction was 1.3% higher month-over-month. Nonresidential construction rose 0.1% in June.

Public construction was essentially flat, rising from a revised May estimate of $274.1 billion to $274.2 billion in June. Education construction fell by 1.4% month-over-month and highway construction rose 1.5% month-over-month.

Private residential construction rose 12.1% year-over-year on a seasonally adjusted basis and construction in the manufacturing sector rose 19%. The biggest year-over-year gain came in multifamily residential construction, up 48.8%, with new power plant construction 26.5% higher and lodging construction up 26.3%.

Among public construction sectors, the biggest drop came in residential construction, down 27.5%, with power plant construction off 22.7% and conservation and development construction down 18.8%.

The numbers should be no big surprise. Government spending is falling as local, state and federal governments rein in spending, while private spending is rising as housing inventory falls. Overall, private spending is up 13.1% year-over-year and public spending is down 03.7%.

Paul Ausick