Construction spending saw a slight dip in July but is still up year-over-year, according to the monthly report from the Census Bureau.
- M-O-M: Construction spending fell 0.4% to a seasonally adjusted annual rate of $1.77M in July, down from last June’s 1.1% decline but was this was the second month in a row construction spending declined.
- Y-O-Y: Construction spending is up 8.5% when compared to the same time last year.
Bullseye. Economists hit the nail on the head as they called for a 0.4% decline in spending.
Residential construction saw a bigger 1.5% drop for the month but was still up 14.1% year-over-year.
- Single-family was down 4.0% from June and is now only up 2.9% when compared to the same July 2022.
- Multifamily saw a smaller 0.6% decline but is also down 1.2% year-over-year.
Builder confidence. Looking back in July, homebuilder confidence saw a dramatic drop of 12 points to an index of 55, just above the breakeven point.
The decline will continue. Higher rates and a protentional drop in home prices are putting downward pressure on home builders. Single-family took the biggest hit in July but is still up year-over-year. However, based on the NAHB homebuilder confidence index falling below the breakeven point and economist Robert Dietz declaring a “housing recession.” It is hard to imagine a reason construction spending would increase anytime soon.