{"id":4743,"date":"2016-07-06T14:27:07","date_gmt":"2016-07-06T14:27:07","guid":{"rendered":"http:\/\/minutes.machine.market\/?p=4743"},"modified":"2016-07-06T14:27:07","modified_gmt":"2016-07-06T14:27:07","slug":"construction-mmi-flattens-out-in-july-labor-shortage-affecting-spending","status":"publish","type":"post","link":"https:\/\/machine.market\/blog\/construction-mmi-flattens-out-in-july-labor-shortage-affecting-spending\/","title":{"rendered":"Construction MMI Flattens Out in July, Labor Shortage Affecting Spending"},"content":{"rendered":"

The Construction MMI held steady at 66 in July, as spending remains stubbornly low during the traditionally strong East Coast construction season.<\/p>\n

According to AG Metal Miner<\/a>,\u00a0\u00a0construction spending during May reached a seasonally adjusted annual rate of $1,143.3 billion, 0.8% below the revised April estimate of $1,152.4 billion, but 2.8% above the May 2015 estimate of $1,112.2 billion, according to data<\/a> from the U.S. Census Bureau<\/strong>. Construction spending in the first five months of this year, construction totaled $438.5 billion, which is 8.2% higher than the $405.4 billion for the same period in 2015.<\/p>\n

It\u2019s difficult to quantify the lack of spending increases in what outwardly looks like a robust U.S. construction sector.<\/p>\n

Spending Struggles to Stand Pat<\/h2>\n

Residential construction was at a seasonally adjusted annual rate of $451.9 billion in May, virtually unchanged from the revised April estimate of $451.7 billion, while nonresidential construction was at a seasonally adjusted annual rate of $407.4 billion in May, a mere 0.7% dip from the revised April estimate of $410.1 billion.<\/p>\n

Ken Simonson, chief economist at Associated General Contractors of America<\/a><\/strong>, a construction industry trade group, noted that the latest data affirms complaints that contractors are having an increasingly hard time finding skilled workers to hire.<\/p>\n

\u201cMild winter weather in many regions early in 2016, followed by extreme rains in some locations in May, has probably distorted monthly spending patterns but shouldn\u2019t mask the robust widespread growth in demand for construction so far this year,\u201d Simonson said. \u201cIt appears there will be plenty of activity in the remainder of 2016 \u2014 if contractors can find the workers they need.\u201d<\/p><\/blockquote>\n

We have, indeed, documented the lack of skilled labor in the U.S. market for more than two years now. Labor costs are increasing so much that they are outstripping the savings<\/a> many general contractors had captured from low commodity prices for construction products. While it\u2019s true that many are also cutting costs by using more efficient construction methods<\/a>, the drop in spending is still highly concerning since most sectors look like they should be growing with strong demand and, supposedly, lots of design work on the boards<\/a>.<\/p>\n

Chinese Spending Grows<\/h2>\n

There is, however, good news from abroad. In China, the Caixin\/Markit services purchasing managers\u2019 index for June rose to 52.7 from 51.2 in May on a seasonally adjusted basis. Readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction.<\/p>\n

Beijing has fast-tracked planned infrastructure spending this year to boost growth, and a strong run-up in housing prices as buying restrictions were loosened helped turn around a slowdown in property development. Like many of our sub-indexes this month, it will be interesting to see what effect the U.K.\u2019s vote to leave the European Union has on construction prices when markets have had a month to settle.<\/p>\n

by<\/em> , Jeff Yoders<\/a><\/span> on

 <\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

The Construction MMI held steady at 66 in July, as spending remains stubbornly low during the traditionally strong East Coast construction season. According to AG Metal Miner,\u00a0\u00a0construction spending during May reached a seasonally adjusted annual rate of $1,143.3 billion, 0.8% below the revised April estimate of $1,152.4 billion, but 2.8% above the May 2015 estimate […]<\/p>\n","protected":false},"author":1,"featured_media":4744,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":""},"categories":[2],"tags":[131],"yoast_head":"\nConstruction MMI Flattens Out in July, Labor Shortage Affecting Spending - MachineMarket Blog<\/title>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cranemarket.com\/blog\/construction-mmi-flattens-out-in-july-labor-shortage-affecting-spending\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Construction MMI Flattens Out in July, Labor Shortage Affecting Spending - MachineMarket Blog\" \/>\n<meta property=\"og:description\" content=\"The Construction MMI held steady at 66 in July, as spending remains stubbornly low during the traditionally strong East Coast construction season. 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