US Residential Construction Spending Declines 0.3% in August

A closer look at the US Census Bureau’s latest construction spending report, with a focus on residential construction spending and additional analysis provided by the National Association of Home Builders (NAHB), reveals that private residential construction spending declined 0.3% in August. Year-over-year, spending remained 2.7% higher.

The monthly decline in total private construction spending for August was largely due to reduced spending on single-family and multifamily construction, NAHB reported. Spending on single-family construction fell 1.5%, marking the fifth consecutive monthly decrease. In addition, rising new single-family home inventory and expectations for lower interest rates both weighed on new home building. Despite these challenges, spending on single-family construction was still 0.8% higher than a year earlier.

Multi-family construction spending inched down 0.4% in August after a dip of 0.3% in July. Year-over-year, spending on multi-family construction declined 7.5%, as an elevated level of apartments under construction is being completed. Private residential improvement spending increased 1.0% and was 9.4% higher than a year ago.

Spending on private nonresidential construction was up 3.6% year-over-year. The annual private nonresidential spending increase was mainly due to higher spending for manufacturing, up $36.4 billion, followed by the power category, up $8.8 billion.