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Economy in Brief

U.S. Construction Spending Unexpectedly Declines in September
by Tom Moeller  November 1, 2021

• Private residential construction falls for second month in last three.

• Nonresidential sector building weakens sharply.

• Public sector building drops.

Construction spending declined 0.5% (+7.8% y/y) during September after edging 0.1% higher in each of the prior two months. The August figure was revised from little change. A 0.4% increase had been expected in the Action Economics Forecast Survey.

Total private construction declined 0.5% (+11.1% y/y) during September, the largest of three straight monthly declines. Residential construction weakened 0.4% (+19.3% y/y) after rising 0.1% in August. Single-family building fell 0.6% (+30.4% y/y) after a 0.5% decline. Multi-family construction was off 0.3% (+10.5% y/y) after slipping 0.1% in August. The value of spending on improvements eased 0.1% (8.1% y/y) after rising 1.1% in August.

Private nonresidential construction fell 0.6% in September (-0.5% y/y) following a 0.9% August drop. Power construction declined 1.2% but was unchanged y/y. Transportation construction fell 0.4% (-4.6% y/y). Lodging construction was down 0.7% (-32.8% y/y). Factory sector building fell 1.6% (4.7% y/y) in September.

The value of public construction weakened 0.7% in September (-2.4% y/y) after two roughly 1.0% increases. Commercial construction declined 3.1% (-13.1% y/y) but office construction rose 1.2% in September (-5.0% y/y). Highway & street construction fell 0.7% (7.1% y/y) and heath care construction weakened 3.6% (-2.7% y/y) in September.

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, %) Sep Aug Jul Sep Y/Y 2020 2019 2018
Total -0.5 0.1 0.1 7.8 5.8 4.2 4.1
  Private -0.5 -0.3 -0.1 11.1 6.0 2.1 4.0
    Residential -0.4 0.1 -0.6 19.3 15.1 -2.2 3.5
    Nonresidential -0.6 -0.9 0.7 -0.5 -4.0 7.3 4.7
  Public -0.7 1.2 1.0 -2.4 5.2 11.1 4.3
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