U.S. construction spending in June totaled $1.36 trillion, down 0.7 percent from May and the lowest monthly amount this year, according to the Associated General Contractors of America (AGCA).
June marked the fourth consecutive month of reduced spending.
Construction spending peaked at a record $1.44 trillion in February, but since then has skidded 6 percent, the sharpest four-month decline in ten years, said Ken Simonson, AGCA’s chief economist.
Highway and street construction slowed 1.7 percent, other transportation projects were down 0.6 percent, and educational projects fell by 2.7 percent.
Commercial construction sagged 1.3 percent. Single-family home building slid 3.6 percent, its sharpest drop in almost four years. However, multifamily home construction rose 3 percent.
Other gainers: factory construction edged up 1.7 percent and office building rose 0.3 percent.
With tax revenues vanishing as the economy languishes, construction spending is likely to fall further, ACGA officials warned. They urged Congress to add infrastructure spending to the next economic rescue bill to ensure states and municipalities can “improve roads, retrofit schools, and keep drinking water safe,” said Stephen Sandherr, AGCA’s CEO.
Construction jobs disappeared with the loss in spending.
From June 2019 through June 2020, available construction jobs decreased in 225 out of 358 metro areas, or 62 percent, as surveyed by the AGCA.
The association reported strong gains in construction employment in May and June this year but “those gains were not enough to erase the huge losses in March and April,” Simonson said. “Since the employment data were collected in mid-June, other data suggest construction employment will soon decline, or stagnate at best, in much of the country.”
Hardest hit: the Brockton-Bridgewater-Easton area of eastern Massachusetts lost 37 percent of its construction jobs; New York City lost 24 percent.
TREND FORECAST: While we forecast a short term, slight uptick in homebuilding, there will be a sharp downturn in commercial real estate development and brick and mortar construction. Thus, more jobs will be lost once the current projects under construction are completed.
