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Economy in Brief

U.S. Construction Spending Rose Further 
by Tom Moeller  November 1, 2005

The value of construction put in place matched Consensus expectations for the second month in a row and rose 0.5% in September following an upwardly revised 0.6% gain in August.

Private building activity increased 0.6%. Residential building jumped 1.0% as new single family building surged 1.4% (10.5% y/y) though the value of residential improvements fell 0.2% (-1.0% y/y), the seventh consecutive monthly decline.

Nonresidential building activity fell 0.3% after a 2.1% spike in August due to less commercial sector spending where auto industry outlays fell 4.4% (+9.6% y/y). Office construction surged 3.8% (12.2% y/y) after upwardly revised, small gains in the prior three months.

Public construction spending fell slightly due to a 0.9% (+19.7% y/y) decline 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 Sept Aug Y/Y 2004 2003 2002
Total 0.5% 0.6% 6.8% 10.9% 5.4% 1.0%
Private 0.6% 0.7% 6.2% 13.6% 6.3% -0.4%
  Residential 1.0% 0.1% 8.2% 18.2% 12.9% 8.5%
  Nonresidential -0.3% 2.1% 1.4% 3.9% -5.4% -13.0%
Public -0.0% 0.4% 9.0% 2.5% 2.7% 5.7%
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