According to analysts from Wells Fargo, much of the monthly gain occurred in the residential improvements and public nonresidential spending categories and they noted that higher costs continue to be a headwind.
Key Quotes:
“Total construction spending rose 0.1% in July. Revisions to June and May were negative on balance. While monthly data are volatile, spending is 5.2% higher year-to-date through July.”
“Higher labor and material costs continue to be a headwind, causing projects to be delayed as they no longer pencil out. We expect prices to ease in coming months and overall construction spending to be stronger in the second half of the year.”
“Total residential spending increased 0.6% in July, however nearly all of the gain occurred in home improvement outlays, which rose 2.1%.”
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