NAHB analysis of Census Construction Spending data shows that total private residential construction spending inched up 0.6 percent in September, after a dip of 0.4 percent in August. On a quarterly basis, private residential construction spending climbed 0.9 percent in the third quarter. Private residential construction spending increased in September, despite the decline of the total housing starts amidst the shortage of construction labor and land, rising mortgage rates, and ongoing building material price volatility.
The monthly gains are largely attributed to the strong growth of spending on multifamily. Multifamily construction spending jumped to a $64.2 billion annual pace in September, up 8.7%. It was the highest monthly annual rate since September 2010. Remodeling spending inched up 0.1% in September. However, single-family construction spending slipped 0.8%, but was 3.1% higher since a year ago.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the strong growth in new multifamily construction from 2010 to April 2017, and an ongoing steady growth in single-family construction.
Spending on private nonresidential construction increased 8.9 percent over the year to a seasonally adjusted annual rate of $463.9 billion. The annual nonresidential spending increase was mainly due to more spending on the class of power ($8.0 billion), followed by office ($7.6 billion), and lodging ($4.2 billion).