AGC members continue to report that developers are unable to get loans for commercial real-estate (CRE) projects, and many members have had their own lines of credit tightened or canceled. These observations match the latest survey of senior loan officers by the Federal Reserve, which the Fed summarized on August 17.

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Construction spending in July totaled $958 billion at a seasonally adjusted annual rate (SAAR), 0.2% less than the downwardly revised June total and 10.5% less than in July 2008, the Census Bureau reported today. (Seasonal adjustment is a statistical technique to remove normal weather- or holiday-related fluctuations. Annual rate allows comparison of quarterly or monthly changes to full years.) Private nonresidential spending fell for the fifth month in a row, slumping 1.2% in July, after tumbling 2.2% in June. Losses were most acute for developer-financed categories: lodging, -8.4% for the month and -35% compared to July 2008; office, -1.7% and -26%; and commercial (retail, wholesale and farm), -1.7% and -35%. The only private categories that outpaced the July 2008 level were manufacturing construction, up 0.9% for the month and 47% over 12 months; and power construction, down 0.8% in July but up 10% from a year earlier. Public spending slipped 0.8% from June to July, after five consecutive monthly increases, as cutbacks in state and local government budgets offset federal stimulus dollars. The only significant exception was in water supply projects, where spending increased 3.7%, following a 6.8% jump in June. Private residential construction rose 2.3% for the month as new single-family construction spending surged 7.0% in July, following a 3.1% gain in June. New multi-family construction plunged 3.3% for the month and 37% year-over-year. Residential improvements fell 0.2% in July but rose 6% year-to-year.

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NONRESIDENTIAL CONSTRUCTION SLIDES IN JULY AS STIMULUS DOLLARS 'TRICKLE' OUT TO CONTRACTORS, TOP INDUSTRY ECONOMIST NOTES

Private Nonresidential Spending Falls for Fifth Straight Month While Homebuilding Surges

Downturns in multi-family construction and both private and public nonresidential construction swamped a strong upswing in single-family homebuilding in July according to an analysis of federal construction spending data provided today by a leading construction economist.  That analysis of U.S. Census Bureau data released today shows that total construction spending fell 0.2 percent, seasonally adjusted, from a downwardly revised June total.

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