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Economy in Brief

U.S. Construction Spending Is Substantially Firmer
by Tom Moeller  December 3, 2012

The value of construction put-in-place jumped 1.4% during October after a 0.5% September gain. The latest increase easily beat expectations for a 0.4% rise and caps off seven months totaling 6.6% growth. Private sector spending surged 1.6% (15.5% y/y) led by a 3.0% (20.8% y/y) jump in residential building. Single-family construction surged 3.6% (29.0% y/y). Multi-family building gained 6.3% (53.2% y/y) while spending on improvements increased a lesser 1.8% (8.9% y/y). A relatively weaker gain was scored by nonresidential building which rose 0.3% (10.7% y/y). Commercial construction jumped 1.2% (9.5% y/y) but office building ticked up just 0.1% (17.6% y/y). Construction on health care facilities fell 1.1% (-0.3% y/y).

In the public sector, building activity gained 0.8% m/m (-1.0% y/y). Spending on highways & streets, which is 29% of total public construction spending, fell 2.4% (-5.0% y/y) as state budgets were pinched. Transportation spending, which is 10% of total public, offset some of that decline with a 5.8% (22.0% (0.2% y/y) rise while office construction rose 4.4% (-16.1% y/y). Educational building activity posted a relatively weak 0.9% (-2.8% y/y) rise.

The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.

Construction Put in Place (%) Oct Sep Aug Y/Y 2011 2010 2009
Total 1.4 0.5 1.1 9.6 -3.1 -11.2 -15.3
 Private 1.6 0.8 1.0 15.5 -1.1 -15.2 -22.4
  Residential 3.0 1.1 2.8 20.8 -1.0 -2.9 -29.9
  Nonresidential 0.3 0.5 -0.7 10.7 -1.3 -24.0 -16.0
 Public 0.8 -0.1 1.4 -1.0 -6.4 -3.6 2.1
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