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Report: Retail construction declines in June, but first half up year-over-year


Construction spending in the retail sector saw a dip in June, according to a report by the Associated General Contractors of America, but the first half of the year recorded an overall gain.

Commercial (which includes retail, warehouse and farm) construction declined 1.6% in June, per the report, but climbed 8.6% year-to-date. Association officials said spending appears to have leveled off after a strong early start to the year prompted by mild winter weather conditions in many parts of the country.

"The drop in construction spending over the past three months is probably more a reflection of the very strong gains posted early in the year than of cooling demand for construction," said Ken Simonson, the association's chief economist. "Nearly every major segment had first-half gains of more than 5% compared with a year ago. Contractors, surveys and the media all continue to report plenty of projects are starting or will soon."

Construction spending in June totaled $1.134 trillion at a seasonally adjusted annual rate, 0.6% lower than the May total, Simonson said. He noted that the declines in spending from March to June followed unusually large increases in the previous three months, probably because of exceptionally mild winter weather in some regions. He said the year-to-date increase of 6.2% for January through June 2016, compared with the same months of 2015, provides a truer picture of the industry's condition.

Contractors continue to report strong demand in many parts of the country and appear to continue to struggle to find enough workers to keep pace with demand for construction, the association said.

"We continue to worry that the slowdown in hiring and spending has more to do with the fact contractors don't have enough workers than the fact there isn't enough work out there," said Stephen E. Sandherr, the association's CEO.

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