Construction Spending Increases in October
Construction spending was mixed in October as a rebound in residential and public categories outweighed a downturn in most private nonresidential segments, according to an analysis by the Associated General Contractors of America. AGC officials noted, however, that public investments in infrastructure remain down compared to last year while private-sector demand should remain robust amid continued economic growth.
Private nonresidential construction still appears to have good prospects, assuming the economy continues to expand,” said Ken Simonson, AGC’s chief economist.
Construction spending in October totaled $1.173 trillion at a seasonally adjusted annual rate, up 0.5 percent from the month before and up 3.4 percent from the October 2015 level, Simonson said. He added that the year-to-date total for January through October 2016 compared to the first 10 months of 2015 remains positive, with an overall increase of 4.5 percent, as moderate gains in private nonresidential spending (7.7 percent) and residential spending (5.7 percent) offset a slide of 1.5 percent in public outlays.
Public construction spending jumped 2.8 percent from September to October. However, spending on infrastructure for the first 10 months of the year is generally level with, or lower than, the totals for January–October 2015.
Private nonresidential construction spending dropped 2.1 percent for the month, but the year-to-date total for most project types rose. Manufacturing construction decreased 2.4 percent for the month and is down 3.1 percent year-to-date. Commercial (retail, warehouse and farm) construction declined by 2.4 percent in October but climbed 9.0 percent year-to-date. Private office construction fell 2.0 percent for the month but soared 28 percent year-to-date.
Private residential construction spending increased by 1.6 percent between September and October and rose 5.7 percent year-to-date. Spending on multifamily residential construction increased by 2.8 percent for the month and 17.8 percent year-to-date, while single-family spending also climbed 2.8 percent for the month and rose 5.1 percent year-to-date.