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Economy in Brief

U.S. Construction Spending Unchanged in August as Nonresidential Building Declines
by Carol Stone, CBE  October 1, 2021

• Private residential construction rises for a sixth straight month.

• Private nonresidential construction falls 1% in August; July revised to tiny increase.

• Public sector construction gains for a second month after six consecutive declines.

Construction spending was virtually unchanged in August (8.9% y/y); the 0.3% increase in July was unrevised, according to the U.S. Census Bureau. The Action Economics Forecast Survey expected a 0.3% increase in August.

Total private construction edged down 0.1% in August (13.0% y/y), the first decrease since February. Private residential construction rose 0.4% (24.3% y/y), following July's similar 0.4% increase. Notably, the August gain was all in home improvements, which advanced 2.5% (11.4% y/y). Single-family building decreased 0.7% (38.3% y/y), the first monthly decrease since June 2020. Multi-family building was down 0.8% (12.7% y/y) in August after being unchanged in July.

Private nonresidential construction fell 1.0% in August (-2.3% y/y), following a modest 0.1% increase in July. Religious building had the biggest decrease in August, 2.6% (-12.1% y/y). Transportation construction fell 2.4% (-4.2% y/y). Lodging was down 2.3% (-30.7% y/y), manufacturing -1.7% (+2.1% y/y), power -1.4% (-1.2% y/y), commercial -0.8% (+7.8% y/y) and private education -0.8% (-15.6% y/y). Construction of amusement and recreation projects was unchanged (-9.8% y/y). There were just two sectors with increases: communications, +0.3% m/m (-3.7% y/y) and office +0.2% m/m (-4.2% y/y)

The value of public construction rose 0.5% in August (-4.0% y/y), offsetting the decrease in private construction and producing the unchanged total construction spending. Performance of individual public sectors, as with the private construction sectors, was quite mixed. The increases were in highways and streets, up 1.6% (2.7% y/y), water supply 1.6% (1.2% y/y), public education 1.1% m/m (-5.9% y/y), transportation 0.8% (-9.5 y/y), public sector commercial 0.8% (-10.3% y/y), and sewage and waste disposal 0.2% (+7.8% y/y). Sectors with decreases include conservation and development -4.9% m/m (-19.4% y/y), public safety -2.6% (-36.0% y/y), power -2.2% (+37.2% y/y), office -1.7% (-9.6% y/y) and amusement and recreation -1.1% (-10.0 y/y).

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

Construction Put in Place (SA, %) Aug Jul Jun Aug Y/Y 2020 2019 2018
Total 0.0 0.3 1.0 8.9 5.6 4.3 4.2
  Private -0.1 0.2 1.4 13.0 5.8 2.3 4.0
    Residential 0.4 0.4 2.3 24.3 15.1 -2.0 3.4
    Nonresidential -1.0 0.1 0.0 -2.3 -4.2 7.5 4.8
  Public 0.5 0.5 -0.7 -4.0 4.9 11.0 4.6
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