New Construction Spending Modestly Higher in September

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The U.S. Census Bureau reported Wednesday morning that construction spending in September rose by 0.3% to an estimated seasonally adjusted annual rate of about $1.2195 trillion, above the upwardly revised estimate of $1.216 trillion in August. Compared with September 2016, total spending is up 2%.

For all of 2016, new construction spending rose 4.5% to an estimated total of $1.1624 trillion, compared with the 2015 total of $1.1124 billion. For the first nine months of 2017, construction spending totaled $917 billion, up 4.3% year over year.

The consensus estimate by economists surveyed by Bloomberg News called for flat month-over-month spending in construction for September.

For the month of September, private residential construction was unchanged month over month at $521.45 billion. Private nonresidential construction fell 0.8% month over month and total private construction spending on a seasonally adjusted annual basis fell 0.4% to $942.73 billion, compared with a revised August total of $946.2 billion.

In the private sector, single-family residential construction was 11.9% higher than it was a year ago, and multifamily construction was up 0.9% from September 2016. Private, nonresidential construction is down 0.8% year over year.

In the public sector, seasonally adjusted total spending rose 2.6% compared with August and is 1.6% lower compared with September 2016. Spending on educational facilities increased by 5.2% month over month, and rose 6% from last September’s spending. Public residential construction rose 5.1% month over month and dropped 3.9% compared with September 2016.

Public spending on streets and highways rose 1.1% month over month but remains down 7.4% year over year. Spending on power rose 11% in the month, likely due to repair work following the hurricanes that hit the Gulf coast. Compared with September 2016, spending on power is down 5.7%.

Seasonally adjusted annual total public and private construction spending remains well below the year-to-date peak of $1.2367 trillion posted in May.