The U.S. Census Bureau of the Department of Commerce announced that construction spending during August 2015 was estimated at a seasonally adjusted annual rate of $1,086.2 billion, 0.7 percent (±1.5 ) above the revised July estimate of $1,079.1 billion. The August figure is 13.7 percent (±2.1 ) above the August 2014 estimate of $955.0 billion.
Highway construction was at a seasonally adjusted annual rate of $90.4 billion, 0.4 percent (±6.4 ) below the revised July estimate of $90.7 billion.
During the first 8 months of this year, construction spending amounted to $683.4 billion, 9.8 percent (±1.3 ) above the $622.4 billion for the same period in 2014.
In August, the estimated seasonally adjusted annual rate of public construction spending was $298.2 billion, 0.5 percent (±2.6 ) above the revised July estimate of $296.8 billion. Educational construction was at a seasonally adjusted annual rate of $67.4 billion, 0.2 percent (±4.1 ) below the revised July estimate of $67.5 billion. Spending on private construction was at a seasonally adjusted annual rate of $788.0 billion, 0.7 percent (±0.7 ) above the revised July estimate of $782.3 billion.
- Residential construction was at a seasonally adjusted annual rate of $383.3 billion in August, 1.3 percent (±1.3 ) above the revised July estimate of $378.5 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $404.7 billion in August, 0.2 percent (±0.7 ) above the revised July estimate of $403.8 billion.
“Private construction spending is up 11.4 percent year-to-date from last year’s pace; residential and nonresidential are up 10.7 percent and 12.1 percent,” said Patrick Newport, U.S. economist for IHS Global Insight. “Both the single-family and multifamily residential categories and seven of the 11 non-residential categories are double-digits ahead of last year’s year-to-date pace.
“Public construction is growing again after four fallow years,” he said. “Public construction was up 7.0 percent compared to a year earlier in August; year-to-date, spending was up 5.8 percent. The pickup in growth is broad-based.
“Core construction spending grew at a record-setting 28 percent annualized rate in the second quarter (data started in 1993),” Newport said. “Third quarter spending will come in at just below 10 percent, sturdy but no longer spectacular.
“For economic growth to accelerate from its lackluster pace of the past few years, demand from some source must accelerate first,” Newport concluded. “The construction sector, which currently makes up about 5 percent of GDP, may prove to be one of these sources. Core construction played a pivotal role in the second quarter, contributing 1.4 percentage points to GDP growth. Its third quarter contribution will be less than a third of this, smaller, but still outsized.”