Report: July Construction Spending Fla

WASHINGTON D.C. ?EUR??,,????'??+ The Commerce Department reported Thursday that construction spending was flat in July following a 0.6 percent drop in June. The June decline, which was revised down from an original estimate of a 0.3 percent drop, was the biggest setback since a 1.7 percent drop in January 2004.

Spending on private construction was at a seasonally adjusted annual rate of $856.2 billion, 0.2 percent above the revised June estimate of $854.5 billion. Residential construction was at a seasonally adjusted annual rate of $615.8 billion in July, 0.2 percent above the revised June estimate of $614.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $240.4 billion in July, 0.2 percent above the revised June estimate of $239.9 billion.

In July, the estimated seasonally adjusted annual rate of public construction spending was $243.2 billion, 0.8 percent below the revised June estimate of $245.2 billion. Educational construction was at a seasonally adjusted annual rate of $63.7 billion, 0.6 percent below the revised June estimate of $64.1 billion. Highway construction was at a seasonally adjusted annual rate of $63.9 billion, 2.4 percent below the revised June estimate of $65.5 billion.

Ken Simonson, chief economist of The Associated General Contractors of America (AGC) said construction activity through July showed widespread improvement compared to the first seven months of 2004, but the devastation wrought by Hurricane Katrina will have varied impacts on construction markets for the rest of 2005 and into 2006.

?EUR??,,????'??The gains were well distributed,?EUR??,,????'?? Simonson said. ?EUR??,,????'??Private residential construction climbed 12 percent year-to-date, private nonresidential was up 5.3 percent, and public construction was 5.8 percent higher.?EUR??,,????'??

Simonson added, ?EUR??,,????'???EUR??,,????'??Within the private residential market, multi-family construction jumped 20 percent, nearly twice the growth rate for single-family and improvements. Manufacturing construction continued to lead the private nonresidential category with a 27 percent year-to-date advance, followed by ?EUR??,,????'??multi-retail?EUR??,,????'?? (general merchandise stores, shopping centers and shopping malls), 23 percent, communications, 12 percent and lodging, 9.4 percent. The leading public categories, educational and highways and streets, were up 5.9 and 7.2 percent, respectively.?EUR??,,????'??

Simonson said July?EUR??,,????'???s construction figures overstate ?EUR??,,????'??real?EUR??,,????'??? growth because they don?EUR??,,????'???t adjust for a large run-up that has occurred in the cost of cement, steel, copper, gypsum, and petroleum-based inputs.

?EUR??,,????'??Unfortunately, Katrina will push many of these costs much higher,?EUR??,,????'?? he noted.