The construction industry’s boom years may be over as one of its key strengths, the labor market, has weakened over the past year.
Construction spending fell 0.3% in June to an annualized rate of $2.5 trillion, Commerce Department data showed.
Economists had expected a 0.2% increase. None of those surveyed by Econoday expected a decline.
The Commerce Department also revised down its May figures to a decline of 0.4% instead of the initial 0.1% decline.
Private residential construction spending fell 0.3%, mainly due to a 1.2% decline in single-family home construction, but spending was still 7.3% higher than a year ago. Multifamily construction increased slightly by 0.1%, but was still down 7.3% from June of last year.
Manufacturing construction spending, the largest nonresidential sector thanks to generous U.S. government subsidies, rose 0.1%, the smallest increase this year, but it was still up 19% from 12 months ago. Compared to pre-pandemic spending, spending on factory construction is up nearly 200%.
Spending on power utilities and road and highway construction, previously the largest categories of construction spending, fell 0.6 percent and 0.4 percent, respectively. Spending on commercial buildings fell 1 percent.
Government spending fell 0.4% due to lower spending on road and education construction.
The construction sector added 235,000 jobs in the 12 months through June, accounting for about 9% of total job gains during that period.
