WASHINGTON — Residential construction spending slipped 3.5 percent for the month and is down 33.3 percent from May 2008.
Overall, total construction spending was down 0.9 percent compared to April and was 11.6 percent lower than levels in May 2008.
“Until now, much of the talk about the stimulus package has been just that, talk,” said Associated Builders and Contractors’ chief economist Anirban Basu. “We now approach the moment of truth. The stimulus package should have its maximum impact during the third quarter of this year, adding roughly 3 percent to annualized Gross Domestic Product.
In a separate item, job losses in the non-residential construction sector surged in June to 11,700, according to the July 2 employment report by the U.S. Labor Department. On a year-over-year basis, non-residential building construction employment fell by 88,700, or 10.8 percent, to 734,600.
Residential building construction shed 6,800 jobs for the month and 136,400 from June 2008 as employment in this sector now stands at 700,900. Job losses for total private construction, which includes specialty trade contractors, were 79,000 from May to June, and 992,000 over the past 12 months.
“(This) employment report is a setback for the nation’s economic recovery as job losses far exceeded consensus predictions,” said Basu. “As June was a setback for non-residential construction, the stimulus package is set to have its greatest impact in the quarter ahead, and an emphasis on transportation and infrastructure projects should prove favorable to the construction industry.”