Construction spending fell again in July to an annualized rate of $805 billion, according to the U.S. Census Bureau. That's the lowest number since July 2001. It was a 10.7% decline compared to a year ago and 1.0% lower than June. Today's numbers show that construction spending has been extremely weak all summer and shows no sign of recovering.
In fact, the new report revised downward values for May and June significantly, by $15 billion and $23 billion, respectively. Here's the updated chart:
It's clear from this picture just how far construction spending has fallen. It's down 33.7% since its high in March 2006.
Construction spending declined broadly in July compared to June. Residential spending dropped by 2.5%, while non-residential was down 0.3%. Moreover, both public and private construction spending declined, by 1.2% and 0.8%, respectively. These numbers make clear that you can't really blame the decline solely on the housing market's problems.
This news doesn't bode well for the over 2 million jobless Americans who work in the construction industry. As spending declines, the sector's jobs likely will likely continue to be reduced -- instead of recovering. Although some of these jobs will come back eventually, if any industry is looking to have suffered somewhat structural changes in this recession, it's construction. With the U.S. economy less focused on real estate going forward, fewer construction jobs will be needed.