Construction spending slips in July, PVC softens

Total US construction spending declined in July, driven by a decrease in private investment, according to the latest data from the US Census Bureau.

Polyvinyl chloride (PVC) demand softened through July and into August after growing through the first half of the year. Market participants have said the housing market in particular has not supported strong growth in PVC demand through the summer, even as public spending on infrastructure has blunted some of the weakness in the wider market.

US contract prices rose by 1¢/lb in July to 61.5¢/lb, despite producers initially having sought a 2¢/lb increase. This was largely due to production disruptions from Hurricane Beryl in mid-July combined with rising feedstock costs for ethylene. PVC demand has eroded slightly more in August while production has recovered.

• Total spending fell to the lowest seasonally adjusted annual rate since March.
• Total private construction spending decreased in July while public spending increased.
• The 0.4pc loss in private residential spending undid the gains made in June.
• Total manufacturing spending ticked up month to month, while private commercial extended its decline.
• Highway and street construction extended declines, but remained up year over year.
• Public water and sewage spending ticked upwards on a monthly and yearly basis.

By Aaron May and Cole Sullivan