Construction Spending Up for First Time in Three Months

By: Jann Swanson •

Construction spending in August came in a little higher than expected, posting the first increase in three months.  Unlike housing starts and completions, national spending did not seem affected by Hurricane Harvey.

The U.S. Census Bureau said total construction spending for the month was at a seasonally adjusted annual rate of $1.22 billion, an increase of 0.5 percent from the revised estimate of $1.21 billion in July and 2.5 percent ahead of spending in August 2016.

Analysts were expecting an increase in spending of 0.3 percent on a month-over-month basis.  Predictions among those polled by Econoday ranged from -0.1 percent to 0.5 percent.

On a non-adjusted basis, total spending for the month was estimated at 112.84 billion, up from $111.61 billion in July.  For the first eight months of the year spending has totaled $806.17 billion compared to $769.87 billion over the same period in 2016, an increase of 4.7 percent.

Privately-funded spending was also up, rising by 0.4 percent from a seasonally adjusted annual rate of $950.55 billion in July to $954.82 billion in August; this is up 4.7 percent year-over-year.  Total private spending year-to-date is $627.80, an 8.0 percent gain from the same period last year.

Residential spending continues to perform well and was running 11.6 percent ahead of August 2016. Seasonally adjusted annual spending for this August was estimated at $520,912, an 0.4 percent monthly increase.  Spending on single-family construction was up 0.3 percent and is 11.1 percent higher than a year earlier at $263.73 billion.  Multifamily spending increased 0.9 percent for the month and is outperforming last August by 2.3 percent.

Non-seasonally adjusted spending on residential construction in August was $48.36 billion, $24.64 billion of which was on single family construction. On a year-to-date basis those figures are $341.29 billion and $170.46 billion, increases of 12.6 percent and 8.4 percent respectively.

Total publicly-funded construction was at a rate of $263.49 billion in August, up 0.7 percent from the previous month, but down 5.1 percent year-over-year.  Residential spending is down 16.3 percent from last August to a rate of $5.63 billion.