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Economy in Brief

U.S. Construction Activity Declines Again
by Tom Moeller  November 1, 2016

The value of construction put-in-place fell 0.4% (-0.2% y/y) during September following a 0.5% August dip, revised from -0.7%. The value of construction spending has been moving sideways since the middle of last year, following strong gains from 2012 through 2015. A 0.5% increase had been expected in the Action Economics Forecast Survey.

Building activity in the private sector slipped 0.2% (+2.4% y/y), reflecting a 1.0% decline (+4.1 % y/y) in nonresidential construction, the first negative reading since April. Office construction eased 0.4% (+27.2% y/y), while commercial construction fell 2.4% (+5.9% y/y). Transportation building activity improved 0.6% (-6.4% y/y).

Residential building rose 0.5% (0.9% y/y) after a 1.2% drop. Multi-family building activity increased 2.0% (9.1% y/y), about as it did in August. The value of improvements increased 0.6% (4.0% y/y) following a 2.6% decline. Single-family building improved 0.1% (-2.9% y/y), leaving it 5.3% below the November peak.

Public sector building activity declined 0.9% (-7.8% y/y), leaving it 9.8% below the February peak. Commercial construction fell 12.2% (+5.0% y/y), and education facility activity was off 1.1% (-0.4% y/y). Highway & street construction, which is roughly one-third of the public sector total, improved 0.9% (-4.2% y/y) after declines during six of the prior seven months.

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, %) Sep Aug Jul Sep Y/Y 2015 2014 2013
Total -0.4 -0.5 0.5 -0.2 10.3 11.4 6.3
  Private -0.2 -0.4 1.9 2.4 12.5 15.4 10.9
    Residential 0.5 -1.2 1.9 0.9 16.8 14.6 20.1
    Nonresidential -1.0 0.5 2.0 4.1 8.1 16.3 2.7
  Public -0.9 -1.0 -3.7 -7.8 4.5 1.9 -3.1
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