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Economy in Brief

U.S. Construction Spending Continues to Weaken
by Tom Moeller  December 3, 2018

The value of construction put-in-place eased 0.1% (+4.9% y/y) during October. The weakening was the same as in September, revised from no change. It followed a 0.4% August decline, revised from +0.8%. A 0.4% increase had been expected in the Action Economics Forecast Survey.

In the private sector, activity fell 0.4% (+3.9% y/y) and reversed a 0.4% September gain. Residential building activity deceased 0.5% (+1.8% y/y) following a 0.1% uptick. Single-family construction fell 0.5% (+2.4% y/y), down for seven months in the last eight. Multi-family construction improved 1.0% (3.2% y/y) after a 7.1% surge. Home improvement activity fell 0.9% (+0.4% y/y) and has been falling all year.

Nonresidential construction in October fell 0.3% (+6.4% y/y) after a 0.7% rise. Power facility construction fell 2.4% (+9.4% y/y), down for the fourth month in the last five. The value of commercial building activity declined 0.6% (+0.6% y/y) after a 0.4% increase. Construction of educational buildings improved 0.7% (8.2% y/y) after an 8.7% jump. Easing by 0.9% (-0.7% y/y) was health care building, about the same as in September. The value of transportation building declined 0.9% (+7.8% y/y) and reversed the prior month's increase. Factory sector construction fell 1.0% (+3.1% y/y) following a 0.5% rise. Office construction rose an improved 3.1% (16.3% y/y).

Construction activity in the public sector increased 0.8% (8.5% y/y) in October, after a 1.5% decline. Commercial construction rose 9.5% (26.4% y/y) after a 5.9% increase. Power facility construction increased 1.8% (-1.8% y/y) after two months of sharp decline. Highway and street building, which accounts for about one-third of nonresidential building, eased 0.1% (+5.2% y/y) following a 2.0% drop. Educational building gained 2.6% (9.2% y/y) following a 1.6% rise.

The construction spending figures, some of which date back to 1946 (e.g., public construction figures), are in Haver's USECON database and the expectations figure can be found in the AS1REPNA database.

Construction Put in Place (SA, %) Oct Sep Aug Oct Y/Y 2017 2016 2015
Total -0.1 -0.1 -0.4 4.9 4.5 7.0 10.7
  Private -0.4 0.4 -1.3 3.9 7.1 9.2 12.9
    Residential -0.5 0.1 -2.6 1.8 12.4 10.7 14.2
    Nonresidential -0.3 0.7 0.2 6.4 1.3 7.7 11.5
  Public 0.8 -1.5 2.4 8.5 -3.2 0.7 5.1
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