Housing dragged U.S. construction spending down 0.4 percent in July, the Commerce Department reported, but spending on nonresidential construction was up 0.6 percent during the same period. It was the 10th consecutive monthly gain for nonresidential construction.
“Nonresidential construction shrugged off the turmoil in homebuilding and credit markets in July to post another solid gain,” said Ken Simonson, chief economist for the Associated General Contractors of America (AGC).
“For the first seven months of 2007 combined, total construction was down 3.4 percent and residential plummeted 18 percent compared to the same period in 2006,” Simonson added. “Those figures obscure the 15 percent jump in nonresidential spending.
Simonson also noted that some categories that might seem susceptible to the much-ballyhooed credit crunch showed no signs of slowing down.
“Private nonresidential construction—the type that might seem most vulnerable to a credit pullback—showed no sign of contagion, rising 0.4 percent in July and 17 percent year-to-date,” Simonson said. “The three most speculative components — commercial, office and lodging, all advanced. Commercial construction was up 0.6 percent for the month and 15 percent year-to-date. The two biggest commercial subcomponents—multi-retail – big box and other general merchandise stores, shopping centers and malls – and warehouses, both leaped 4 percent in July and 28 percent year-to-date. Private office construction climbed 0.6 percent and 22 percent, and lodging shot up 0.8 percent and 60 percent.”