Reed, NABE, Fed report sharp drops in construction; CPI, some materials costs rise
The value of nonresidential construction starts in June "decreased 71 percent from May, more than offsetting the 27 percent increase the previous month," Reed Construction Data Chief Economist Jim Haughey reported on Thursday [July 16], based on Reed's compilation of starts. "Every construction category declined significantly in June. ... The May-June boom/bust is substantially random. Nonetheless, the slim starts total reported for June does signal that nonresidential construction is entering the weakest period in this business cycle. But by itself, June was not as grim as the starts total suggests. ... The 22 percent year-to-date decline is a better indicator of the trend for the rest of the year than the 71 percent June decline. The current bid calendar suggests that much of the June drop will be reversed in the next few months," according to a July 21 Data DIGest report.