U.S. Construction Spending Declines in October
Summary
- Total October construction -0.3% (+9.2% y/y); September revised down to +0.1% and August revised down to -1.1%.
- Residential private construction falls 0.3% (+8.6% y/y), the fifth straight m/m decline, led by a 2.6% drop (-5.4% y/y) in single-family building.
- Nonresidential private construction decreases 0.8% (+9.5% y/y) following five consecutive m/m rises.
- Public sector construction increases 0.6% (10.0% y/y), the fifth successive m/m gain, led by a 0.6% rise (10.1% y/y) in nonresidential public construction.
The value of construction put in place fell 0.3% m/m (+9.2% y/y) in October after a 0.1% uptick in September (+0.2% initially) and a 1.1% decline in August (-0.6% previously), according to the U.S. Census Bureau. The October result was the second monthly fall in three months. A 0.3% m/m October decline had been expected in the Action Economics Forecast Survey. The Fed's aggressive tightening of monetary policy is continuing to weigh on the housing market.
Private construction was down 0.5% (+9.0% y/y) in October after virtually unchanged in September (+0.4% initially) and a 1.8% drop in August (-0.7% previously). Residential private construction declined 0.3% (+8.6% y/y), the fifth consecutive monthly drop, after a 0.6% September decrease (0.0% initially). Single-family building slid 2.6% (-5.4% y/y), the fifth straight m/m slide, after a 2.7% September drop. Multi-family building, however, rose 0.6% (1.6% y/y), the fourth m/m gain in five months, on top of a 0.6% September rise. Home improvement building grew 2.0% (32.6% y/y) in October, the 14th m/m advance in 15 months, after a 1.4% September rebound.
Nonresidential private construction fell 0.8% (+9.5% y/y) in October, the first m/m fall since April, after an unrevised 1.0% increase in September. The October fall reflected drops of 9.9% (-1.6% y/y) in religious construction, 3.2% (+33.6% y/y) in manufacturing construction, 0.8% (-13.4% y/y) in utilities private construction, 0.6% (+5.3% y/y) in transportation private building, 0.6% (+6.3% y/y) in health care private construction, and 0.4% (+22.4% y/y) in commercial private construction. Educational private construction was essentially unchanged (14.8% y/y) following four straight monthly rises. To the upside, amusement & recreation private construction increased 3.8% (15.9% y/y), the fourth m/m gain in five months. Lodging construction rose 1.6% (22.1% y/y), the seventh straight m/m rise. Communication private construction grew 0.6% (0.7% y/y), the sixth consecutive m/m advance. Office private building was up 0.2% (0.9% y/y), the fifth successive m/m gain.
The value of public construction rose 0.6% (10.0% y/y) in October, the fifth straight m/m rise, after an upwardly revised 0.8% gain in September (-0.4% initially), with residential public construction down 0.9% (+3.2% y/y) and nonresidential public construction up 0.6% (10.1% y/y). The following nonresidential public constructions posted their m/m gains in October: utilities (22.8%; 29.7% y/y), health care (4.2%; 13.2% y/y), public safety (1.8%; 9.6% y/y), amusement & recreation (1.3%; 9.3% y/y), conservation & development (0.9%; 12.1% y/y), office (0.7%; 1.1% y/y), education (0.5%; 3.1% y/y), and transportation (0.2%; 1.2% y/y). In contrast, spending on highways & streets, which makes up 30.3% of public construction spending, slid 0.8% (+11.5% y/y), the first m/m slide since June. The following nonresidential public constructions also fell m/m in October: commercial (-1.6%; +21.9% y/y), sewage & waste disposal (-1.1%; +16.5% y/y), and water supply (-0.2%; +34.5% y/y).
The construction spending figures, some of which date back to 1946, can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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