Construction spending down in July

U.S. construction spending slipped 0.6% in July to a seasonally adjusted annual rate of $1.084 trillion, its lowest July level since 2004, according to a Department of Commerce report released today. Residential and commercial spending was 4.8% lower than in July 2007. Total residential construction spending fell for the 16th consecutive month to a seasonally adjusted rate of $365.58 billion, down 2.1% from June, and down 27.1% from July 2007. It is the lowest spending level since May 2001. However, office, health care, education, transportation and other infrastructural spending — both by the government and the private sector — continued to increase in July. Total office construction spending rose to a seasonally adjusted rate of $74.97 billion, up 2.1% from June and 16.8% from July 2007. Spending on health care construction climbed to $45.37 billion, up 0.1% from June and 6.3% from July 2007, while educational spending rose to $105.28 billion, up 1.7% from June and 6.3% from July 2007. Transportation spending increased to $37.11 billion, up 3.8% from June and 11.5% from July 2007. Also, public construction, which refers to government-funded construction, rose to a seasonally adjusted rate of $309.72 billion, up 1.4% from June and 8.1% from July 2007. The increase in office and public construction appears to reflect the increased construction of commercial and infrastructural facilities needed to support the large surge in residential communities that were built during the housing boom, a Commerce Department spokesman said. “When residential construction was hitting all-time highs two or three years ago, everything else has to catch up afterwards,” he said, adding that New York City accounted for part of the surge in office construction, due to the rebuilding on the Ground Zero site.