ACEC Market Insights: Second Consecutive Monthly Decline in Construction Spend

Recently, the US Census released the results of its monthly Value of Construction Put in Place Survey. The survey provides estimates of the total dollar value of construction work done in the U.S. This data includes design and construction spending for public and private projects.

The seasonally adjusted annual rate of $2.14 trillion for June 2024 represents a monthly decline of -0.3%. This is the second consecutive monthly decline for total construction spending in the US. The last time there were two consecutive months of decline was October, 2022. This decline is present in Public and Private projects, as well as in the Residential and Nonresidential sectors as well.

Source: US Census Value of Construction Put in Place Survey August 1, 2024 release

The latest release shows a plateauing in total construction growth since the April 2024 peak of $2.16 trillion. Year over year growth is still positive at 6.2%. Overall economic growth in the US saw a surprise increase in 2024 Q2 GDP growth at an initial 2.8% estimate, up from 1.4% growth for 2024 Q1.

Source: US Census Value of Construction Put in Place Survey August 1, 2024 release

With respect to year over year growth in individual markets, manufacturing continues to be a top area for design & construction spending with total year to date (YTD) spending of $111.4b.

For the sectors with the lowest levels of growth, several categories are experience decline including lodging and commercial. These sectors and office are all sensitive to interest rate levels and reflect the impact borrowing costs have had on land development for these sectors.

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Top Construction (Public & Private) Year to Date Project Growth by Classification

Project Classification	YTD Spending Jan – Jun 2023 (millions)	YTD Spending Jan – Jun 2024 (millions)	Percent Change	Absolute Change (millions)
Total Public safety	$6,508	$9,009	38.4%	$2,501
Total Manufacturing	$88,749	$111,415	25.5%	$22,666
Total Religious	$1,704	$2,013	18.1%	$309
Total Water supply	$12,864	$14,764	14.8%	$1,900
Total Power	$63,726	$71,935	12.9%	$8,209

 

Bottom Construction (Public & Private) Year to Date Project Growth by Classification

Project Classification	YTD Spending Jan – Jun 2023 (millions)	YTD Spending Jan – Jun 2024 (millions)	Percent Change	Absolute Change (millions)
Total Commercial	$69,712	$62,163	-10.8%	-$7,549
Total Lodging	$12,161	$11,609	-4.5%	-$552
Total Conservation and development	$5,395	$5,392	-0.1%	-$3
Total Office	$48,485	$49,019	1.1%	$534
Total Transportation	$30,938	$31,445	1.6%	$507

 Source: US Census Value of Construction Put in Place Survey, August 1, 2024 release (Not Seasonally Adjusted).