Construction spending in May fell at a seasonally adjusted annual rate of 0.4 percent, following a drop of 0.2 percent in April, according to a July 3 report from the U.S. Census Bureau.
Even though this back-to-back decline was the first in three years, year to date spending remained 8.6 percent higher than January through May of 2005.
Private residential construction dropped 0.8 percent and private nonresidential spending fell 0.3 percent for the month, more than offsetting a rise of 0.7 percent in public construction.
Still, “nonresidential construction remains much stronger than a year ago,” said Ken Simonson, chief economist for the Associated General Contractors of America, after reviewing the report.
While private nonresidential construction was down slightly from April to May, it’s up 13 percent compared to May 2005. Every category is in the plus column year-to-date.
The lull in private nonresidential spending in May possibly reflects an acceleration of activity in earlier months due to unusually mild weather, rather than the beginning of a long-term cooling period, Simonson said.