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Economy in Brief

U.S. Construction Spending Recovers Its Earlier Decline
by Tom Moeller  December 2, 2013

The value of construction put-in-place gained 0.8% in October (5.3% y/y) following a 0.3% September slip. A 0.4% rise in building activity had been expected. The September figures, released for the first time, were contained in this release due to the federal government shutdown.

A 3.9% jump (2.3% y/y) in the value of public sector building activity led the increase in construction activity during October. Improvement here has persisted since the spring. The October rise reflected an 8.8% gain (-14.1% y/y) in office building as well as an 8.5% lift (-3.7% y/y) in education. Power construction also jumped 8.0% (10.8% y/y) but spending on highways & streets inched up just 0.6% (9.2% y/y). Spending here accounts for 29% of total public sector construction activity.

Private sector construction activity slipped 0.5% (+6.6% y/y) in October and it's been moving sideways since May. Residential building was off 0.6% m/m but remained up 17.8% y/y. Spending on improvements fell 1.2% (+13.2% y/y) and has been down sharply during three of the last four months. Single-family home building activity slipped 0.6% (+17.8% y/y) to the lowest level in three months but multi-family building activity jumped 2.2%, up by more than one-third y/y. Nonresidential building activity slipped 0.5% (-3.4% y/y). It's loss of forward momentum has been broad-based but most notable in power (-18.8% y/y) and communication (-16.5% y/y) construction activity.

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 2012 2011 2010
Total 0.8 -0.3 0.1 5.3 8.1 -1.9 -11.2
  Private -0.5 0.4 -0.1 6.6 14.4 0.2 -15.2
    Residential -0.6 1.7 -0.3 17.8 14.6 1.9 -2.9
    Nonresidential -0.5 -1.0 0.1 -3.4 14.3 -1.4 -24.0
  Public 3.9 -1.9 0.6 2.3 -2.9 -5.4 -3.6
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