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Economy in Brief

U.S. Construction Spending Up 
by Tom Moeller  October 3, 2005

The value of construction put in place matched Consensus expectations and rose 0.4% in August following an upwardly revised 0.3% July gain.

Private building activity rose 0.4% led by a 0.8% gain in nonresidential building. Lodging building rose a strong 3.2% (-8.3% y/y) and multi-retail building added 1.6% (30.7% y/y) to the 12.5% spike in July. Office construction fell 1.1% (+4.2% y/y) for the third decline in the last four months.

Residential building rose 0.2% as new single family building increased 0.3% (7.5% y/y) for the second consecutive month. The value of residential improvements rose a modest 0.4% (-0.4% y/y) but the value is off 14.3% from the February peak.

Public construction spending rose 0.5% following upwardly revised gains during prior months led by a 1.4% (14.9% y/y) jump in construction activity on highways & streets, nearly one third of the value of public construction spending.

These more detailed categories represent the Census Bureau’s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

Construction Put-in-place Aug July Y/Y 2004 2003 2002
Total 0.4% 0.3% 6.1% 10.9% 5.4% 1.0%
Private 0.4% 0.1% 5.3% 13.6% 6.3% -0.4%
  Residential 0.2% 0.0% 5.9% 18.2% 12.9% 8.5%
  Nonresidential 0.8% 0.4% 3.7% 3.9% -5.4% -13.0%
Public 0.5% 0.6% 9.2% 2.5% 2.7% 5.7%
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