WASHINGTON -- "Construction spending rebounded in June after a tiny drop in May and a small increase in April," said Ken Simonson, chief economist for the Associated General Contractors of America (AGC). Simonson commented on an August 1 report from the Census Bureau that showed the value of construction put in place rose at a seasonally adjusted annual rate of 0.3% in June, which came after a drop of less than 0.1% in May and a gain of 0.2% in April.
"In all three months, private residential construction dropped sharply -- 1% in June -- while private nonresidential and public construction spending increased," Simonson added. "In June, these categories rose 2.7% and 0.8% respectively. I expect these trends to continue."
On the nonresidential side, manufacturing spending surged 8% for June and 24% in the first half of 2006, compared to the same period of 2005. Multi-retail outlets added 1.1% in June and 52% year-to-date.
"I expect to see more of the same for the rest of the year," Simonson said. "As builders work through current backlogs of sold but not-yet-built houses, they will curb new construction sharply. On the private nonresidential side, manufacturing, freight and passenger transportation, oil, gas, alternative energy projects, lodging and hospital markets should all keep contractors busy."
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