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Economy in Brief

U.S. Construction Spending Rebounds
by Tom Moeller  December 2, 2014

The value of construction put-in-place recovered 1.1% (3.3% y/y) during October following a 0.1% September slip, revised from -0.4%. Despite the latest gain, forward momentum continued to fade. The increase exceeded expectations for a 0.6% rise in the Action Economics Forecast Survey.

Private sector construction outlays increased 0.6% in October and y/y growth improved to 4.0%. Residential building activity gained 1.3% (1.9% y/y) but remained 2.8% below the January peak. Single-family building grew 1.8% (13.2% y/y) and multi-family building increased 1.0% (27.2% y/y). Spending on improvements rose 0.6% (-19.2% y/y), the first monthly gain since December. Nonresidential building activity slipped 0.1% (+6.4% y/y). A 2.6% decline (+9.3% y/y) in commercial building offset a 0.8% gain (20.9% y/y) in office building. Educational building was roughly unchanged (-5.2% y/y) but amusements & recreation construction jumped 1.0% (-5.2% y/y).

Building in the public sector recovered 2.3% (1.5% y/y) following two months of decline. The rise lifted activity 6.9% from its December low. A 2.4% rise (+1.8% y/y) in nonresidential building reflected an 8.1% increase (-2.0% y/y) in office construction. Educational building gained 2.2% (6.1% y/y) and highways & streets construction improved 1.1% (-0.1% y/y).

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 2013 2012 2011
Total 1.1 -0.1 0.1 3.3 5.7 9.2 -2.1
  Private 0.6 0.5 0.2 4.0 10.1 16.0 -0.1
    Residential 1.3 0.8 -0.8 1.9 20.4 14.4 1.9
    Nonresidential -0.1 0.2 1.3 6.4 0.6 17.5 -1.8
  Public 2.3 -1.6 -0.2 1.5 -3.5 -2.8 -5.4
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