Sunday, October 13, 2019

US construction spending up slight 0.1% in August

 

 

As reported by the Associated Press, U.S. construction spending edged up a disappointing 0.1% in August as continued weakness in nonresidential construction offset the best gain in home building in nine months.

The latest figure marked the fourth month of lackluster results, including declines in May and June and a flat reading in July, the Commerce Department reported Tuesday. Construction in April had risen 0.6%.

Home construction, which has been in the doldrums for much of this year, was up 0.9% in August. It was the best showing since a 3.2% surge last November. Nonresidential construction declined 1% as spending on schools, hospitals and hotels were all down.

Spending on government construction projects edged up 0.4% as a gain of 0.6% in state and local spending offset a 2.2% drop in the smaller federal government category.

Economists had been expecting a stronger overall gain of 0.5%, hoping that a rebound in housing would provide enough support to give a boost to the entire building industry.

The August gain in housing reflected a 1.4% increase in single-family home construction which offset a 0.9% decline in the smaller and more volatile apartment segment.

Economists are hoping that housing gets a boost from falling mortgage rates, reflecting the decision by the Federal Reserve to cut its benchmark rate for the first time in nearly a decade in July. The Fed followed that up with another quarter-point reduction in September.

Overall construction after adjusting for seasonal variations came in at an annual rate of $1.29 trillion in August, down 1.9% from a year ago.

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