Economy
Federal Reserve Holds Benchmark Rate Steady, Three Dissents Highlight Internal Divisions
The Federal Reserve kept its federal funds rate target range unchanged at 3.5% to 3.75% at its July meeting, passing by a 9-to-3 vote. Three regional Fed presidents dissented, advocating for a 25-basis-point rate hike. Chair Kevin Warsh described the discussion as a "healthy debate" and emphasized that achieving price stability remains the core task.
New project starts cool in June, growth rate falls after boom in large-scale projects
After several billion-dollar projects broke ground in May, U.S. construction activity slowed notably in June. Dodge Construction Network reported that total starts fell 19.9% month-over-month in June, with the annualized rate dropping to $1.42 trillion. Nonresidential building starts declined 9.1% month-over-month, with manufacturing plunging 62.9%; non-building projects (including infrastructure) fell 37.7% month-over-month. However, commercial building edged up 1.2% month-over-month, and total nonresidential starts in the first half still rose 6.2% cumulatively.
United States Imposes 50% Tariffs on Multiple Key Imports from Canada
U.S. President Trump signed multiple proclamations on July 20, citing Section 338 of the Tariff Act of 1930, determining that Canada's trade practices in several key sectors constitute discrimination against the United States, and deciding to impose a 50% tariff on various imported goods from Canada starting August 19. The tariff applies to all relevant goods, regardless of whether they originate within the USMCA framework, but energy, potash, goods subject to Section 232 tariffs, as well as fish and critical minerals, are not included in the scope of the additional tariffs.
Skanska's Q2 orders hit record $7 billion
Skanska's Q2 orders rose 20% year-over-year to SEK 68 billion, a record. The US market contributed SEK 39.5 billion, with robust demand for data centers and infrastructure. The company said material price fluctuations and the impact of New York's data center ban are manageable, emphasizing the high quality of its order backlog.
Construction costs fell month-on-month in June, may rise again in coming months
ABC data shows that construction input prices fell 1.1% month-on-month in June, mainly driven by lower oil prices, but the Iran conflict has pushed up oil prices and prices of tariffed goods such as steel and copper, and costs are expected to climb again in the coming months.
Data Center Planning Cooling Drags Down June Construction Planning Index
According to Dodge Construction Network data, the Dodge Momentum Index fell 1.9% month-over-month in June, primarily as data center planning retreated from recent highs, but commercial and institutional project planning improved overall, still up 21.8% year-over-year.
Data center projects lead the latest economic report on the construction industry
Multiple indicators in the construction industry rebounded in May, but growth momentum was highly concentrated in data center construction, while other sectors remained weak.
U.S. private construction spending continued its downward trend in May
According to U.S. Census Bureau data and industry association analysis, private nonresidential construction spending fell 0.3% month-over-month in May and 6.6% year-over-year, marking seven consecutive months of decline, mainly dragged down by reduced manufacturing-related spending. Public nonresidential project spending edged up 0.4% month-over-month and rose only 0.3% year-over-year. Data center construction remains the primary growth engine, but warehouse and office spending fell 8.5% and 11.9% year-over-year, respectively. Industry groups are urging Congress to quickly pass new highway and transportation legislation to sustain momentum in public infrastructure investment.