US construction spending dipped in May

Total construction put in place in the US for the 12 months to the end of May stood at US$ 842 billion. This was a -0.2% fall on the figure of US$ 843 million seen in April and it was -8.0% lower than the figure of US$ 915 million seen in May last year.

While publicly funded construction held up relatively well, with only a -2.9% drop from May last year, there was a -10,7% decline in private construction over the course of the last 12 months. This comprised a -15.2% fall in the non-residential sector, with office, commercial, health care and manufacturing structures hit particularly hard. In contrast, private residential construction was up +11.2% compared to May last year, although there was a -0.4% drop from April 2010.

These falls were partially offset by rises in four areas of public construction - highway & street, sewage & waste disposal, water supply and conservation & development. However, rises in these sectors were not enough to drive an increase in public construction, let alone total construction.

Commenting on the figures, Ken Simonson, chief economist for the Associated General Contractors of America (AGC) said, "Stimulus has made a difference, but Congress needs to provide long-term funding for transportation and water projects to assure further economic growth."