US Construction Spending: Broad based weakness on June - Wells Fargo

Total construction spending in the US fell 1.1% in June. Analysts at Wells Fargo point out that construction spending data were slightly weaker than assumed in Q2 GDP. 

Key Quotes: 

“Admittedly volatile on a monthly basis and prone to substantial revisions, total construction spending unexpectedly declined as the second quarter came to a close. June’s 1.1 percent decline was driven by a 3.5 percent drop in public construction, though the contraction was also seen in private residential (-0.5 percent) and private nonresidential (0.3 percent).”

“Extended overall economic growth should remain supportive to the construction sector in the second half of the year. That said, rising interest rates, higher material costs and labor scarcity will continue to challenge the construction sector.”