Single-Family Construction Spending Slows

Construction spending in August declined slightly from its July pace the Census Bureau said on Monday. It was the third consecutive month it has fallen.  Public and private expenditures across all sectors was at a seasonally adjusted annual rate of 1.142 trillion, down 0.7 percent from July's rate of 1.150 trillion and 0.3 percent below the August 2015 estimate of 1.145 trillion. The July figure was revised down from an original estimate of 1.153 trillion, a -0.3 change from June rather than statistically unchanged.  

Analysts surveyed by Econoday had expected results in a range of -0.3 percent to +0.5 percent on a month-over-month basis.  The consensus was for a 0.3 percent gain.

On an unadjusted basis total construction spending in August was $106.72 billion, up from $105.80 billion in July.  Year-to-date spending at the end of August was $754.95 billion, a 4.9 percent improvement over the same period in 2015.

Privately funded construction was at a seasonally adjusted annual rate of $871.6 billion, down 0.3 percent from July but 2.7 percent ahead of August 2015. Year-to-date private expenditures are up 7.0 percent on an unadjusted basis.

Private sector residential construction is also running ahead of 2015 on an unadjusted basis with single-family construction up 7.4 percent compared to the first eight months of last year and multi-family construction rising by 20.7 percent.  Total residential construction in August was estimated at $42.25 billion, with $22.26 billion going to new single-family construction and 5.53 billion to multi-family housing.

On a seasonally adjusted annual basis residential construction looks a little more problematic.  The adjusted annual figure for all residential construction is $449.19 billion, down 0.3 percent for the month and up 1.4 percent for the year.  New single family construction was responsible for the August loss, dropping 0.9 percent from July and 1.5 percent compared to a year earlier.  Multi-family spending was up 2.4 percent and 13.9 percent for the two earlier periods.

Total public construction spending in August was at a seasonally adjusted annual rate of $270.62 billion, down 2.0 percent for the month and 8.8 percent on an annual basis.  Residential construction spending was 3.9 percent above the July rate at 6.35 billion but down 6.1 percent year-over-year.