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Economy in Brief

U.S. Construction Spending Eases
by Tom Moeller  October 1, 2014

The value of construction put-in-place edged 0.8% lower (+5.0% y/y) during August following a 1.2% July increase. During the last five months, the value of construction spending has been little changed. The latest increase disappointed expectations for a 0.3% rise in the Action Economics Forecast Survey.

Private sector construction outlays fell 0.8% in August (+6.3% y/y) and reversed a 0.9% July gain. Nonresidential building led the drop with a 1.4% shortfall. It reflected a 3.5% decline (+0.2% y/y) in commercial building and a 1.0% drop (+18.6% y/y) in office construction. Residential building slipped 0.1% (+3.7% y/y), continuing the significant slowdown in momentum since early-2013. Single-family homebuilding edged 0.7% higher (+8.3% y/y) after a 0.8% increase, but y/y growth of 8.3% was down from 35.0% y/y early-last year. Multi-family building improved 1.4%. Momentum here also was off markedly. Year-to-year growth of 35.9% was roughly half that of late-2012. Spending on improvements fell 2.0% in August, the seventh month of decline this year. The year-to-year decline of 10.3% compared to the peak of +16.4% y/y early last year.

The forward momentum behind public sector building activity has firmed. Despite the 0.9% August decline, the y/y advance of 1.9% compared to negative growth extending back to 2009. Office building is up 20.2% y/y compared to a one-quarter decline last year and 2.9% y/y growth in spending on education compared to a 9.8% decline last year. Countering these gains was 0.1% slip in spending on highways & streets.

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

Construction Put in Place (%) Aug Jul Jun Y/Y 2013 2012 2011
Total -0.8 1.2 -1.6 5.0 5.7 9.2 -2.1
  Private -0.8 0.9 -1.7 6.3 10.1 16.0 -0.1
    Residential -0.1 0.4 -1.8 3.7 20.4 14.4 1.9
    Nonresidential -1.4 1.3 -1.7 9.2 0.6 17.5 -1.8
  Public -0.9 2.1 -1.3 1.9 -3.5 -2.8 -5.4
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