US Construction Spending: Unchanged in May, moderate growth expected - Wells Fargo

Analysts from Wells Fargo analyzed today’s US construction spending report of the month of May. They forecast moderate construction growth despite the recent slowdown. 

Key Quotes: 

“Construction outlays in May were roughly flat on the month, but upward revisions to April’s 1.4 percent contraction to a 0.7 percent decline bring some positive light. On a 3-month moving average basis, spending was down 0.2 percent in May.”

“Total construction spending is up 5.2 percent year-over-year based on a 3-month average, consistent with our forecast of moderating construction growth despite recent softening.

“Private non-residential construction continues to lose steam, now down 7.3 percent on a 3-month moving average annual rate. The commercial sector in particular has seen cooling, posting a 0.8 percent 3-month average May contraction.”

“Public spending posted a solid May number of $286.9 billion, but over the year remains 0.6 percent slower. Of note is the public health care sector, up 13.7 percent over the year.”