Construction spending made a comeback in August, rising to a seasonally adjusted annual rate of $511.0 billion for the month and restoring the sector to the upward trend it has enjoyed for three of the last four months for which data is available. Spending gained 1.4% in August, more than making up for July’s 1.3% drop, according to data released today by the U.S. Census Bureau. And when residential improvements, a poorly estimated category, are subtracted from the report, spending’s gain improves further to 1.5%.
"This category has risen at a 14.6% annual rate over the three months ending in August," wrote Patrick Newport, U.S economist at IHS Global Insight in a release regarding today’s numbers. "So while the rest of the economy has faltered recently, construction has picked up speed."
Unfortunately for home builders, not much of that gain has been coming from private residential spending. That sector improved 0.7%, to a seasonally adjusted annual rate of $237.8 billion, with small gains in both single-family and multifamily construction. The real bright spot was in the data revisions, which showed a multifamily sector that "is now slowly rising, on a path to recovery," Newport says. Single-family on the other hand, is still "stuck at the bottom and heading nowhere soon," he says.
Public spending had a strong showing for the month, jumping 3.1%, much of which came from infrastructure. Revisions in this area also offered a hopeful picture, reporting that public spending has grown for three straight months.
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.