Residential Sector Was Key to October Construction Spending Increase

Total construction spending in October was at a seasonally adjusted annual rate of $1.439 trillion according to U.S. Census Bureau estimates. This was an increase of 1.3 percent from the revised September estimate of $1.420 trillion and 3.7 percent higher than spending in October of 2019. While virtually all residential spending is privately funded, the increase in that sector was the second largest (behind public safety spending) of any in the overall year-over-year comparison.

Spending for the month, prior to adjustment, totaled $128.008 billion compared to $130.251 billion in September. Spending for the year-to-date (YTD) is up 4.3 percent, from $1.140 trillion in 2019 to $1.190 during the first 10 months of 2020.

Privately funded construction spending was at an annual rate of $1.094 trillion during the month compared to $1.079 trillion in September, an increase of 1.4 percent. Spending grew by 3.7 percent on a year-over-year basis and is 4.2 percent higher on a YTD basis at $893.706 billion.

Privately funded residential spending was at an annual rate of $637.138 billion. This was a 2.9 percent increase from September and up 14.5 percent from the previous October. Single family spending was at a rate of $324.023 billion and spending on new construction of buildings with five or more units was at a rate of $90.162 billion. These were month-over-month increases of 5.6 percent and 1.2 percent, respectively. On an annual basis adjusted spending on single-family houses increased 13.3 percent and on multifamily construction the gain was 18.4 percent.

Residential spending in October was $56.462 billion before adjustment with $29.591 billion of the total going to single-family residences and $7.770 billion to multifamily housing. YTD residential spending increased by 9.3 percent to $497.753 billion while the total for single-family and multifamily construction rose 5.0 percent and 3.7 percent thus far in 2020 compared to the same period in 2019.

Publicly funded spending was at a rate of $344.785 billion compared to $341.411 billion in September and was 3.7 percent higher than in October 2019. Residential spending dipped 1.1 percent to a rate of $8.971 billion but was still 24.9 percent higher year-over-year. Total public spending on construction for the first 10 months of the year was $295.884 billion, up 4.7 percent over the same period last year. Residential spending at $7.108 billion was 34.0 percent higher YTD than in 2019.