Total spending on construction rose 6.1 percent to $1,317.2 billion above the June 2017 estimate of $1,241.3 billion, according to the U.S. Census Bureau's Construction Spending data released on Wednesday. The data indicated that construction spending had also increased at a healthy clip during the first six months of the year, rising 5.1 percent to $619.9 billion compared to $589.6 billion recorded in 2017.
However, spending saw a slight dip across the board in June on a month-over-month basis. The data said that overall spending during June 2018 fell 1.1 percent and was below the revised May estimate of $1,332.2 billion.
The report provides a monthly estimate of the total dollar value of construction work done in the U.S. The survey covers construction work done each month on new structures or improvements to existing structures for private and public sectors. Data estimates include the cost of labor and materials, cost of architectural and engineering work, overhead costs, interest and taxes paid during construction, and contractor’s profits.
Spending on private construction was down 0.4 percent month-over-month to $1,019.8 billion. When broken down, residential spend was down 0.5 percent in June at $568.3 billion, and nonresidential spending decreased 0.3 percent below May's revised estimate of $453 billion. On an annual basis, private construction spending grew 6.5 percent from June 2017, while residential expenditure for new single-family homes increased 8.8 percent over the same period last year.
According to the National Association of Home Builders, the month over month decline is primarily attributed to a significant drop in both single-family and multifamily spending in June. "This is in line with the soft readings of single-family and multifamily housing starts in June," The NAHB said. However, it found that on a quarterly basis, private residential construction spending climbed 4 percent in the second quarter, recording the most significant quarterly gain since 2017.