Economy Watch: Total Construction Spending Down, Spending on Apartments, Offices Up

While overall construction spending was down in May, it was still an improvement from May 2015, especially in certain sectors.
Credit: U.S. Census Bureau, Construction Spending, May 2016
Credit: U.S. Census Bureau, Construction Spending, May 2016

The Census Bureau reported on Friday that U.S. construction spending during May 2016 came in at an annualized rate of $1,143.3 billion, or 0.8 percent below the bureau’s April estimate. The May figure is, however, still 2.8 percent above the May 2015 estimate.

Both private and public construction were down for the month, the bureau noted, with spending on private projects dropping 0.3 percent, while public projects were off 2.3 percent. Year-over-year, private construction spending rose by 4.7 percent in May, while public construction was down 2.6 percent.

Some types of construction spending continue to grow robustly; Spending on new multifamily residential projects, for instance, gained 1.8 percent for the month in May, and was up year-over-year by 23.9 percent.

Spending on office construction dropped 0.4 percent for the month in May, but was up for the year by 22.5 percent. Spending on hotel projects rose by 1.9 percent for the month, and by 20.6 percent for the year. Spending on new manufacturing facilities, on the other hand, seemed to be taking a hit because of the persistence of the strong dollar: it was down 1.9 percent for the month and 6.9 percent for the year.