With the economy still in a fragile recovery, U.S. construction spending remained relatively weak in October, improving just 0.7% to a seasonally adjusted annual rate of $802 billion. This is down 9.3% from October 2009, according to the U.S. Census Bureau, which released the figures Wednesday.
Residential construction, which includes residential improvements, grew 2.5% on a monthly basis in October to a seasonally adjusted pace of $229.6 billion, thanks to an uptick in multifamily spending. (On an annual basis, total residential construction spending was down 9.2%.)
According to the government, multifamily spending posted a 3.2% increase to a seasonally adjusted level of $14.6 billion in October. That is still 32.6% below the same month one year ago, but “recent evidence indicates this sector is slowly starting to climb out of a very deep hole,” said Patrick Newport, U.S. economist for IHS Global Insight in Lexington, Mass., who noted that the government has revised multifamily spending estimates upward for both August and September.
That’s not likely to happen anytime soon with the single-family numbers, which have slid downward for six months in a row, according to Newport.
In October, single-family construction spending slipped 1.2% compared to the previous month and fell 3% annually with a seasonally adjusted level of $105.7 billion. “This category likely will decline for a few more months, since it is based on a weighted average of recent single-family housing starts, which closely track single-family permits,” Newport predicted.
Alison Rice is senior editor, online, at BUILDER magazine.