Construction Spending Growth Slowest since June 2013

(Negative) The real value of construction put in place in July 2016 was $105,669 (millions of real dollars). While this was the highest value of construction put in place since September 2015, compared with one year ago spending in July was up just 4.2 percent. That was the slowest rate of growth since June 2013. The month-over-month rate of growth has decelerated substantially since September 2015, falling to 4.2 percent from 25.2 percent. As a result, the annual rate of growth decelerated for the fourth straight month. This trend will continue in the upcoming months.

Residential construction spending is slowing as well. Month-over-month growth decelerated to 5.0 percent in July, which was the slowest rate of growth since April 2012. The annual rate of growth is still quite strong at 18.0 percent, but it has decelerated seven months in a row and will continue to do so in upcoming months.

Real construction spending is a good leading indicator for construction materials, hardware, and HVAC industrial production.