U.S. Construction Spending Increases for the Eighth Consecutive Month in August
Summary
- Total August construction +0.5% (7.4% y/y), matching expectations.
- Residential private construction rises for the fourth straight month, led by m/m construction gains in single-family and multi-family.
- Nonresidential private construction advances for the 14th time in 15 months.
- Public sector construction rebounds, led by a rise in nonresidential public construction.
The value of construction put in place rose 0.5% m/m in August after an upwardly revised 0.9% gain in July (+0.7% initially) and a downwardly revised 0.5% increase in June (+0.6% previously), according to the U.S. Census Bureau. The August reading registered the eighth straight monthly gain and matched the forecast in the Action Economics Forecast Survey. The year-on-year rate rose to 7.4% in August, the highest since October 2022, from 5.6% in July and a low of 1.3% in April; nevertheless, remaining down from 10.8% y/y in August 2022 and a peak of 16.5% y/y in April 2022.
Private construction grew 0.5% (5.6% y/y) in August after rises of 1.2% in July (+1.0% initially) and 0.2% in June (+0.6% previously). The August reading was the fourth consecutive m/m increase. Residential private construction rose 0.6% (-3.1% y/y) in August, the fourth successive m/m rise, on top of a 1.6% gain in July. Single-family building grew 1.7% (-10.6% y/y), the fourth straight m/m increase, after a 2.7% July rise; it was 45.1% of the residential private construction. Multi-family building rebounded 0.6% (24.0% y/y), the 12th m/m gain in 13 months, following a 0.1% July easing; it was 15.3% of the residential private construction. Home improvement building, however, fell 0.7% (-1.9% y/y), the second m/m fall in three months, after a 1.0% July increase; it was 39.7% of the residential private construction.
Nonresidential private construction increased 0.3% (19.7% y/y) in August, the 14th m/m gain in 15 months, after a 0.6% rebound in July. The August increase reflected m/m private construction rises of 1.3% (16.4% y/y) in lodging, 1.2% (65.9% y/y) in manufacturing, 0.7% (14.9% y/y) in transportation, 0.7% (0.4% y/y) in communication, 0.4% (0.1% y/y) in amusement & recreation, 0.2% (6.8% y/y) in office, and 0.2% (5.6% y/y) in utilities. To the downside, the following nonresidential private constructions fell m/m in August: religious (-3.4%; +2.4% y/y), commercial (-0.9%; +4.6% y/y), and educational (-0.5%; +21.9% y/y). Meanwhile, health care private construction was virtually unchanged (+11.6% y/y) in August following three straight m/m drops.
The value of public construction rose 0.6% (14.1% y/y) in August, the 11th m/m rise in 12 months, after a 0.1% downtick in July (-0.4% initially), reflecting a 1.1% decline (+3.8% y/y) in residential public construction and a 0.6% rebound (14.4% y/y) in nonresidential public construction. The following nonresidential public constructions increased m/m in August: conservation & development (5.8%; 18.8% y/y), utilities (2.4%; 55.0% y/y), health care (2.1%; 14.4% y/y), office (1.5%; 20.3% y/y), transportation (1.3%; 7.1% y/y), sewage & waste disposal (0.3%; 21.0% y/y), educational (0.2%; 12.4% y/y), commercial (0.2%; 1.1% y/y), and amusement & recreation (0.1%; 21.6% y/y). Notably, spending on highways & streets, which makes up 30.2% of public construction spending, rose 0.4% (12.9% y/y) in August, the fifth straight m/m rise, on top of a 0.5% increase in July. In contrast, construction for public safety fell 0.6% (+15.2% y/y) in August following three successive m/m gains; construction for water supply dipped 0.1% (+9.5% y/y), the first m/m decline since January.
The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.
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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