Construction Spending Declines Third Consecutive Month


Construction spending fell for the third month and fourth in five months. Also, September was revised lower.

Construction spending has rolled over, led by residential.

Econoday economists expected a 0.3% rise this month (why, I have no idea given the state of housing). Instead, total spending fell 0.1% in October from September that was revised 0.1% lower.

This marks the third consecutive decline and fourth in five months.

Key Points

  • Spending on new single-family homes in October fell 0.5 percent with home-improvement spending down 0.9 percent, both offsetting a strong 1.0 percent rise in multi-family homes.
  • Private nonresidential construction fell 0.3 percent in October with declines in power, manufacturing, transportation and commercial components offsetting another strong gain for office building.
  • Public building has been a strength for the construction sector as it was again in October. Educational building rose 2.6 percent in the month though highway & street spending did edge 0.1 percent lower.
  • Total residential spending is up only 1.8 percent year-on-year with single-family up 2.4 percent, home improvements up only 0.4 percent, and multi-family up 3.2 percent. The softness on the residential side is limiting overall construction spending to a 4.9 percent yearly gain.
  • Year-over-year, education is up 9.2 percent and highway & streets up 5.2 percent.

In addition to housing, private construction spending looks to have topped.

Get ready for makeshift government projects.

Mike "Mish" Shedlock

Comments (1)
No. 1-1

Many large home construction projects involve HELOCs. Higher interest rates make this less appealing.

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