About $1.5 billion of total construction annual spending occurred in June, only up by about 0.1% over May, according to the new U.S. Census Bureau report.
Private spending drastically outpaced public spending by almost $1 billion. In fact, public construction spending was down 7.5% compared with the prior year.
Economist Says Pandemic Creates Ongoing Uncertainty: The big news came in the form of residential construction spending, which was up 1.1%, or $763.4 billion.
That’s mostly because there was a split in construction spending, with homeowners building more new single-family units and adding improvements to their existing lots while hotels, offices and universities invested significantly less in the space, said Redfin lead economist Taylor Marr.
“We actually saw a pretty decent residential spending,” Marr said, adding there’s a lot of uncertainty as to how private spending will unfold in the coming months and years as public behavior continues to adapt with the pandemic.
“No one really knows exactly how those things are going to bounce back.”
Supply Chains Remain A Problem: If passed, the new bipartisan infrastructure bill could help boost public spending, Marr said, which was significantly lagging according to the Census Bureau report’s numbers.
Airports and runways could get particular help with the added spending, which could in turn aid airline companies.
Still, one of the blockades to construction spending is the same issue broadly plaguing much of consumer spending.
“If there were no supply chain issues you would definitely expect you to see (higher) spending,” said Marr.
Photo: Unsplash photo by Avel Chuklanov.
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