The Construction MMI showed no movement for our July reading, checking in at 81, the same mark as last month’s reading.
According to U.S. Census Bureau data released July 3 — which includes the most recently available construction spending data for the month of May — spending just about held flat from April to May. U.S. construction spending in April amounted to $1,230.4 billion and fell slightly to $1,230.1 billion in May.
The spending picture is more robust when considering the year to date. During the first five months of 2017, total construction spending amounted to $469.2 billion, 6.1 percent more than the $442.4 billion for the same period in 2016.
Total private construction ($943.2 billion) was down 0.6% from the previous month but up 6.2% compared with May 2016. Public construction, meanwhile, amounted to $286.9 billion, up 2.1% from the April total but down 0.6% from May 2016.
While the year-to-date numbers are encouraging, a pair of issues are causes for concern among those in the construction industry.
The Architecture Billings Index (ABI), put out by the American Institute of Architects, noted that billings for U.S. architecture firms increased for the fourth straight month in May.
The ABI report was mostly positive, but included concerns regarding labor shortages and rising prices of building materials. According to the report: “The US Labor Department’s Bureau of Labor Statistics recently reported that prices for construction materials like steel, copper, aluminum, and asphalt have risen at a double-digit percentage pace over the past year. Cement, lumber, and gypsum have risen at a high single-digit pace over this period.”
As the specter of the Trump administration’s Section 232 investigations into steel and aluminum imports continues to loom, construction outfits might have to deal with further price increases if tariffs are slapped onto imports.
By region, the South notched the strongest month. With a score of 50 as a midpoint (meaning no decrease or increase), the South region of the U.S. came in strongest in the most recent ABI, with a score of 56.1. The West (52.3), Midwest (50.4) and Northeast (46.5) followed.