U.S. construction spending dipped in May but posted strong, broad-based gains for the first five months of 2016 compared to the same period in 2015, according to an analysis released July 1 by the Associated General Contractors of America.                

AGC officials said the construction spending gains come amid signs that contractors are having an increasingly hard time finding qualified workers to hire.

"Mild winter weather in many regions early in 2016, followed by extreme rains in some locations in May, has probably distorted monthly spending patterns but shouldn't mask the robust widespread growth in demand for construction so far this year," said Ken Simonson, the association's chief economist. "It appears there will be plenty of activity in the remainder of 2016—if contractors can find the workers they need."

As we reported in our last issue, construction in Michigan was up 2 percent in May compared to 12 months prior, but was lagging after a strong start in 2016.

Total U.S. construction spending in May 2016 totaled $1.14 trillion, 0.8 percent lower than the April total, the AGC said, but spending totals for April and March were each revised up by nearly 2 percent compared to a report from the Census Bureau. So, the AGC estimates that construction in the U.S. has risen 8.2 percent from January to May 2016.

By category nationwide year-to-date, private nonresidential construction climbed 9.2 percent; power construction (including oil and gas pipelines) rose 9.4 percent; manufacturing dropped 0.8 percent; commercial work was up 8.6 percent, public construction was up 3.8 percent, educational construction gained 8.6 percent and highway and street construction was up 6.9 percent.

Meanwhile, the Dodge Momentum Index for U.S. construction rose a sharp 11.2 percent in June compared to May. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The overall Index is now at its highest level since early-2009; however, it has proven to be volatile on a month-to-month basis over the last two years. This unpredictability may continue through the remainder of the year, Dodge said, given the uncertainty related to the health of the U.S. economy and the upcoming November elections.