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Economy in Brief

U.S. Construction Spending Is Little Changed
by Tom Moeller  September 3, 2019

The value of construction put-in-place improved 0.1% (-2.3% y/y) during July following two months of 0.7% decline. June's drop was revised from -1.3%. A 0.3% rise had been expected in the Action Economics Forecast Survey.

Construction activity in the private sector eased 0.1% (-4.8% y/y) and reversed June's improvement. Residential construction rose 0.6% (-5.9% y/y), the first increase since December. Single-family building jumped 1.4% (-8.5% y/y), the first meaningful increase since early last year. The value of home improvements rose 0.2% (-5.4% y/y) after a 0.7% rise. Multi-family construction declined 1.1% (+6.2% y/y) following a 0.8% drop.

Private nonresidential building activity declined 0.8% (-3.4% y/y) during July, down for the third month in the last four. Manufacturing building rose 1.9% (4.4% y/y) and health care construction improved 1.5% (10.5% y/y). Office construction increased 0.3% (6.2% y/y). These gains were offset by a 5.1% weakening (-2.3% y/y) in transportation sector construction. Commercial building declined 3.6% (-21.2% y/y) and power construction slipped 0.3% (+0.5% y/y).

Public sector building activity increased 0.4% during July (5.2% y/y) following two months of sharp decline. Construction of highways & streets fell 2.7% (+6.5% y/y). It accounts for roughly one-third of the dollar value of public building activity. Transportation sector building improved 0.7% (8.9% y/y) while commercial construction jumped 8.9% (27.2% y/y). Health care building eased 0.6% (-8.0% y/y).

The construction spending figures, some of which date back to 1946, are in Haver's USECON database. The expectations reading can be found in the AS1REPNA database.

Construction Put in Place (SA, %) Jul Jun May Jul Y/Y 2018 2017 2016
Total 0.1 -0.7 -0.7 -2.3 3.9 4.5 7.0
  Private -0.1 0.1 -0.5 -4.8 3.1 7.1 9.2
    Residential 0.6 -0.0 -0.4 -5.9 2.6 12.4 10.7
    Nonresidential -0.8 0.2 -0.6 -3.4 3.7 1.3 7.7
  Public 0.4 -3.1 -1.4 5.2 6.8 -3.2 0.7
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