U.S. Construction Spending Drops More Than Expected in August
Summary
- Total August construction -0.7% (+8.5% y/y); July revised down to -0.6% but June revised up to +0.6% (from a drop).
- Residential private construction decreases 0.9% (+12.5% y/y), the third straight m/m decline, led by a 2.9% drop (-0.02% y/y) in single-family building.
- Nonresidential private construction edges down 0.1% (+5.5% y/y), the same m/m pace as July (revised down from a rise).
- Public sector construction declines 0.8% (+3.3% y/y), the first m/m slide since May, reflecting drops of 2.7% (-0.2% y/y) in residential public construction and 0.8% (+3.4% y/y) in nonresidential public construction.
The value of construction put in place fell 0.7% m/m (+8.5% y/y) in August after a downwardly revised 0.6% decline in July (-0.4% initially) and an upwardly revised 0.6% gain in June (-0.5% previously), according to the U.S. Census Bureau. The August result was the second consecutive monthly fall following nine straight m/m rises. A 0.2% m/m August decline had been expected in the Action Economics Forecast Survey.
Private construction decreased 0.6% (+9.9% y/y) in August following a downwardly revised 1.2% July decline (-0.8% initially) and nine successive m/m gains. Residential private construction fell 0.9% (+12.5% y/y), the third consecutive m/m fall, after a 1.7% July drop (-1.5% initially). Single-family building slid 2.9% (-0.02% y/y), the third straight m/m slide, after a 4.3% July decrease. Multi-family building, however, recovered 0.4% (-0.2% y/y), the second m/m gain in three months, after a 0.4% July decline. Home improvement building rose 1.0% (37.2% y/y) in August after a 1.3% July rise, continuing its meaningful string of gains since August 2021.
Nonresidential private construction ticked down 0.1% (+5.5% y/y) in August following a 0.1% easing in July (+0.4% initially) and two successive m/m increases. The August downtick reflected drops of 0.9% (-14.2% y/y) in utilities private construction, 0.5% (+21.6% y/y) in manufacturing construction, and 0.3 (+16.7% y/y) in educational private construction. Commercial building was virtually unchanged (+19.4% y/y) after a 0.1% July downtick and three consecutive m/m rises. To the upside, lodging construction increased 1.7% (10.0% y/y), the fifth straight m/m gain. Transportation private building rose 1.2% (-3.7% y/y), the fourth m/m rise in five months. Religious construction grew 0.9% (6.5% y/y), the third m/m gain in four months. Amusement & recreation private construction rose 0.5% (10.7% y/y), the third successive m/m rise. Communication private construction grew 0.4% (-0.9% y/y), the smallest of four consecutive m/m gains. Office building increased 0.3% (-1.2% y/y) and heath care private construction rebounded 0.1% (8.5% y/y).
The value of public construction fell 0.8% (+3.3% y/y) in August, the first m/m fall since May, after a 1.9% advance in July (+1.5% initially), with residential public construction down 2.7% (-0.2% y/y) and nonresidential public construction down 0.8% (+3.4% y/y). Office public construction fell 5.1% (+1.3% y/y), the deepest m/m fall since October 2020, after a 1.9% July rebound. Health care public construction (-2.1%; +5.7% y/y), commercial public construction (-1.5%; +11.2% y/y), and public safety construction (-1.2%; +0.3% y/y) posted their first m/m drops since April. Spending on highways & streets, which makes up 28.7% of public construction spending, slid 1.4% (+1.7% y/y), the third m/m slide in four months. Water supply construction fell 1.1% (+23.1% y/y), the first m/m fall since December. Educational public construction was down 0.4% (-3.0% y/y), the fifth m/m drop in six months. Transportation public construction fell 0.4% (+0.9% y/y) after a 0.6% July rebound. Utilities public construction slipped 0.1% (+7.4% y/y), the fourth m/m decline in five months. In contrast, sewage & waste disposal construction (1.5%; 11.5% y/y) and conservation & development public construction (1.4%; 18.6% y/y) registered their third straight m/m increases; amusement & recreation public construction rose 0.7% (7.0% y/y) following a 0.02% July downtick.
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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