Construction spending rose 1.4%, led by non-residential construction. Let’s dive into the details.
The Census Bureau reported a 1.4 Percent Rise in Construction Spending in October from September.
The Econoday consensus only called for a 0.5% rise so let’s start there.
It’s not housing that drove construction spending up a very sharp 1.4 percent in October but non-residential activity which had been lagging in this report. Spending on private non-residential construction jumped 0.9 percent in the month with strength centered in office construction and transportation construction. Despite the improvement, year-on-year spending on the non-residential side is still negative, at minus 1.3 percent. Public building also had a strong month with educational building up 10.9 percent for a standout year-on-year rate of 14.6 percent. Spending on highways & streets was also strong in October, up 1.1 percent though still down on the year, at minus 8.5 percent.
Residential spending has been leading this report but October was moderate, up 0.4 percent overall and held back by a 1.6 percent decline for multi-units. But home improvements were strong in the month, up 1.4 percent for an 8.7 percent yearly rate. Total residential spending is up a year-on-year 7.4 percent with spending on new single-family homes up a very significant 8.9 percent.
But new homes aside, overall construction spending is up only 2.9 percent which is a very moderate total that evokes this week’s Beige Book where modest-to-moderate still dominated the description of the economy.
Private vs. Public Construction
For the month, public construction rose a whopping 3.9% contributing 0.8 percentage points to the overall rise of 1.4%.
Year-over-year (total construction) numbers show the biggest winners are transportation, education, and lodging.The biggest loser is manufacturing.
Private Construction
Winners and Losers
Private manufacturing is down 14.3% from a year ago with total manufacturing down 14.1%.
