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Macro Flash Report

Construction Spending

Takeaway: May’s Construction Spending (CPIP) came in below market expectations for the 5th consecutive month, showing slight declines. This year’s construction demand has disappointed; however, year-over-year spending remains firmly positive. The mixed performance in spending, with declines in key private sectors but gains in public projects, suggests a volatile outlook for the construction industry, which may result in inconsistent demand for steel.

Construction Spending MoM declined by -0.1%, following a revised 0.3% increase in April and contrary to market expectations of a 0.1% rise.

  • Private sector spending dropped by -0.3%, driven by a -0.3% reduction in non-residential Residential construction also decreased by -0.2%, primarily due to a -0.7% decline in single-family projects.
  • Conversely, public construction spending increased by 5%, with residential projects up by 2.6% and non-residential projects slightly rising by 0.4%.
  • On a yearly basis, overall construction spending grew by 4% in May.