In-Depth Review of US Construction Spending in August

A closer look at the US Construction Spending Report for August released by the US Census Bureau on Monday (10-2-23), with additional analysis provided by the National Association of Home Builders, reveals that private residential construction spending increased 0.6% in August. This marks the fourth consecutive increase since May, standing at a seasonally adjusted annual rate of $879.9 billion. However, year-over-year, total private residential construction spending is 3.1% lower.

NAHB analysis indicates the total construction monthly increase is attributed to more spending on single-family and multifamily construction. Spending on single-family construction increased 1.7% in August after increasing 2.7% in July. Year-over-year, spending on single-family construction was 10.6% lower.

Multifamily construction spending crept 0.6% higher in August and was 24% above the August 2022 estimate, largely the result of strong demand for rental apartments. On the other hand, private residential improvement spending decreased 1.9% in August and was almost 2% lower when compared to August 2022.

Spending on private nonresidential construction increased 19.7% year-over-year. The annual private nonresidential construction spending increase was mainly due to higher spending on the class of manufacturing category ($78.7 billion), followed by the power category ($5.53 billion).