U.S. Construction Spending Unexpectedly Eases in August, the Third Straight M/M Decline
Summary
- August construction spending -0.1% m/m (+4.1% y/y); July and June revised down.
- Residential private construction -0.3% m/m, led by a 1.5% decline in single-family building.
- Nonresidential private construction -0.1% m/m, down for the second successive month.
- Public sector construction +0.3% m/m, led by a 1.6% rebound in residential public building.
The value of construction put in place dipped 0.1% m/m in August after downwardly revised decreases of 0.5% in July (-0.3% initially) and 1.1% in June (+0.04% previously), according to the U.S. Census Bureau. The August reading was the third consecutive m/m decline following a string of gains during the May 2024 to November 2022 period. A 0.2% m/m August increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 4.1% in August from 5.3% in July, registering the slowest pace since April 2023’s low of 3.8%. The latest y/y figure was lower than 6.9% in August 2023, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.
Private construction declined 0.2% (+3.1% y/y) in August following downwardly revised drops of 0.7% in July (-0.4% initially) and 1.4% in June (+0.3% previously). Residential private construction fell 0.3% (+2.7% y/y) in August, the third straight m/m fall, after a 1.0% drop in July. Single-family building slid 1.5% (+0.8% y/y), the fifth consecutive m/m slide, after a 1.9% July decrease; it was 46.0% of the residential private construction. Multi-family building fell 0.4% (-7.5% y/y), the ninth straight m/m fall, on top of a 0.3% July decline; it was 14.2% of the residential private construction. To the upside, home improvement building rose 1.0% (9.4% y/y) in August, the first m/m rise since May, following a 0.1% downtick in July; it was 39.8% of the residential private construction.
Nonresidential private construction eased 0.1% (+3.6% y/y) in August following a 0.4% decline in July and three successive m/m rises. The August easing reflected m/m declines in the following nonresidential private constructions. These included educational (-1.1%; +4.2% y/y), health care (-0.8%; +1.3% y/y), commercial (-0.4%; -14.8% y/y), and utilities (-0.3%; +7.6% y/y). In contrast, the following private constructions rose m/m in August: religious (1.5%; 3.8% y/y), communication (1.3%; -0.2% y/y), transportation (0.8%; 10.3% y/y), lodging (0.6%; -10.6% y/y), manufacturing (0.2%; 18.1% y/y), and office (0.2%; 1.1% y/y). Meanwhile, amusement & recreation private construction held virtually steady (-2.8% y/y) in August following a 2.7% July drop and two consecutive m/m increases.
The value of public construction rose 0.3% (7.8% y/y) in August, the sixth m/m rise in seven months, after an upwardly revised 0.5% rebound in July (+0.1% initially), reflecting gains of 1.6% (4.6% y/y) in residential public construction and 0.3% (7.9% y/y) in nonresidential public construction. The August rise reflected m/m increases in the following nonresidential public constructions. These included health care (3.4%; 8.8% y/y), conservation & development (2.2%; 4.3% y/y), amusement & recreation (1.6%; 24.4% y/y), and public safety (0.8%; 30.7% y/y). Notably, spending on highways & streets, which made up 28.9% of public construction spending, rebounded 1.1% (3.5% y/y) in August, the first m/m increase since March, reversing a 0.6% decline in July. To the downside, the following public constructions fell m/m in August: commercial (-1.5%; +35.2% y/y), office (-1.4%; +6.3% y/y), utilities (-1.2%; +13.8% y/y), water supply (-0.9%; +18.1% y/y), sewage & waste disposal (-0.5%; +4.5% y/y), and transportation (-0.2%; +3.8% y/y). Meanwhile, educational public construction was essentially unchanged (5.7% y/y) in August following two successive m/m declines.
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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