Steel Markets
Nonresidential Construction Spending Down Again in June
Written by David Schollaert
August 2, 2021
Construction sectors continued to diverge in June, reported the Associated General Contractors of America (AGC). Although residential construction increased month on month and when compared to the same year-ago period, nonresidential construction spending fell again. The nonresidential declines include a steep drop in spending on highway and street projects, prompting the AGC again to urge Congress to expedite a bipartisan infrastructure bill.
“The pandemic has created a tale of two construction industries, a residential market where demand continues to surge and a nonresidential market that is struggling to gain traction,” said Stephen Sandherr, AGC’s CEO. “The federal government has a real opportunity to boost nonresidential construction by passing the bipartisan infrastructure measure as quickly as possible.”
Construction spending in June totaled $1.55 trillion at a seasonally adjusted annual rate, an increase of 0.1% from May, and up 8.2% from the pandemic-depressed rate in June 2020. Once again, residential construction saw monthly and year-over-year gains while nonresidential construction spending lagged. The residential construction segment climbed 1.1% for the month and 28.8% year-over-year. The nonresidential construction segment fell by 0.9% compared to May and 6.6% compared to June 2020.
Private nonresidential construction spending fell 0.7% from May to June and 6.0% since June 2020, with year-over-year decreases in all 11 subsegments. The largest private nonresidential category, power construction, fell 1.9% year over year and 1.2% from May to June. Among the other large private nonresidential project types, commercial construction – comprised of retail, warehouse and farm structures – retreated 2.1% from one year ago and 0.2% for the month. Manufacturing construction fell 0.7% from a year earlier and 1.1% from May. Office construction decreased 9.1% year over year and by 0.1% compared to May.
Public construction spending plunged 7.5% year-over-year and 1.2% for the month. Among the largest segments, highway and street construction declined 7.6% from a year earlier and 5.3% compared to May 2021. Public educational construction decreased 9.1% year over year and 0.8% in June. Spending on transportation facilities fell 5.7% over 12 months but was up 1.1% in June.
The AGC noted that the new bipartisan infrastructure measure proposes to invest more than $1.2 trillion to build the nation’s roads, bridges, transit systems, airports, ports, and waterways, drinking water and wastewater systems, energy infrastructure and more. Congress should pass the measure as quickly as possible to have the broadest impact on creating new construction career opportunities, the association said.
“It would be a shame if certain members of Congress were to hold new infrastructure investments, and the job opportunities they create, hostage to impose unrelated partisan measures that would undermine the economic recovery,” Sandherr added.
David Schollaert
Read more from David SchollaertLatest in Steel Markets
GrafTech’s Q2 loss widens in ‘challenging’ business environment
GrafTech cited a “challenging” part of the business cycle as its net loss widened in the second quarter.
CRU: Poor steel margins continue to push down raw material prices
Both iron ore and coking coal prices fell this week because of resistance from buyers. Iron ore prices have continued to fall throughout the past week, following sharp declines in steel prices in China, given no new policy announcement from the ‘Third Plenum’ meeting.
Op-Ed: The myth of the Mexican steel surge
We have heard ominous warnings about a flood of Mexican steel threatening the US market. It's the kind of rhetoric that gets thrown around often with little regard for the facts. The reality is that the Mexican steel surge is simply not happening, and the US steel industry has consistently maintained a significant trade surplus in finished products with Mexico. In 2023 alone, this surplus exceeded $3 billion.
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]
Influx of coated products fuels recent import surge
Steel imports fell back in May from April’s recent high but remained elevated compared to the levels seen over the past year. A deeper dive into the data confirms what SMU has been hearing from sources: Coated sheet is driving the recent rise in overall import levels.