Construction Spending: Slight Decline in October Release

Total private residential construction spending decreased slightly from the revised August and newly released September figures to a seasonally adjusted annual rate of $326.9 billion in October 2013 according to Census estimates. The current reading is a 0.6% decrease from the prior month and 17.8% higher than a year ago.

Today’s release included September and October data for construction put in place. The September data release was delayed by the government shutdown. The September reading was a 1.7% increase from August and 10.3% higher than a year ago.

Total private residential construction spending was at a market low point of $228.5 billion in June 2009. Although spending improved for all categories, the figures are well below their respective peaks. Since market low points, total private residential construction spending is up 43.1%: single-family 86.9%, multifamily 163.6% and improvement-related spending 17.1%.

Single-family spending registered a decrease of 0.6% for the month. The the home improvement category saw a decrease of 1.2% for the month. The multifamily category saw a healthy increase of 2.2%.

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For October, on a 3-month moving average basis, single and multifamily spending continued to experience improvements over the course of 2013. Single-family spending increased by 13.9% while multifamily increased by 22.3%. Remodeling decreased 2.9% on a 3-month moving average basis.

Spending continues to improve for all categories, but remains well below their respective peaks. The data show a slowdown from the prior month for single-family and improvements that are reflective of the soft patch the housing sector entered in the fall. In spite of this month-over-month slowdown, the data show significant improvements in residential construction spending for all categories from the prior year. In fact, builder confidence remains solid.



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