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Economy in Brief

U.S. Construction Activity Declines
by Tom Moeller  October 3, 2016

The value of construction put-in-place fell 0.7% (-0.3% y/y) during August following a 0.3% July dip, revised from little change. The value of construction spending has been moving sideways since the middle of last year, following strong gains from 2012 through 2015. A 0.3% August increase had been expected in the Action Economics Forecast Survey.

Building activity in the private sector eased 0.3% (+2.7% y/y), reflecting a 0.3% dip (+1.4% y/y) in residential construction which followed a 0.5% rise. Single-family building fell 0.9% (-1.5% y/y), pushing it down 5.7% below the peak nine months ago. The value of improvements eased 0.3% (+1.5% y/y). To the upside, the value of multi-family building jumped 2.4% (13.9% y/y).

Nonresidential building activity declined 0.4% (+4.2% y/y) following a 1.0% jump. It was the first drop since April. Office building jumped 2.3% (28.0% y/y) while amusement construction improved 2.1% (18.8% y/y). Offsetting these gains was a 2.0% drop (+6.9% y/y) in commercial construction, and a 1.4% drop (-7.4% y/y) in factory construction.

The value of public sector building activity declined 2.0% (-8.8% y/y), the fifth decline in the last six months. Transportation building declined 8.8% (-13.5% y/y). Highways & streets construction fell 2.9% (-8.3% y/y), off 12.3% from its January peak. Education building improved 0.4% (-0.8% y/y), and office construction ticked 0.1% higher (-3.7% y/y).

The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.

Construction Put in Place (SA, %) Aug Jul Jun Aug Y/Y 2015 2014 2013
Total -0.7 -0.3 0.9 -0.3 10.3 11.4 6.3
  Private -0.3 0.8 0.9 2.7 12.5 15.4 10.9
    Residential -0.3 0.5 0.8 1.4 16.8 14.6 20.1
    Nonresidential -0.4 1.0 0.9 4.2 8.1 16.3 2.7
  Public -2.0 -3.5 1.0 -8.8 4.5 1.9 -3.1
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