The U.S. Census Bureau of the Department of Commerce announced that construction spending during September 2015 was estimated at a seasonally adjusted annual rate of $1,094.2 billion, 0.6 percent (±1.8 percent) above the revised August estimate of $1,087.5 billion. The September figure is 14.1 percent (±2.1 percent) above the September 2014 estimate of $959.2 billion.
During the first 9 months of this year, construction spending amounted to $786.6 billion, 10.5 percent (±1.3 percent) above the $711.8 billion for the same period in 2014.
In September, the estimated seasonally adjusted annual rate of public construction spending was $300.0 billion, 0.7 percent (±3.0 percent) above the revised August estimate of $297.8 billion. Educational construction was at a seasonally adjusted annual rate of $69.1 billion, 2.4 percent (±4.1 percent) above the revised August estimate of $67.5 billion.
Highway construction came in at a seasonally adjusted annual rate of $91.2 billion, 0.3 percent (±7.2 percent) above the revised August estimate of $90.9 billion.
Spending on private construction was at a seasonally adjusted annual rate of $794.2 billion, 0.6 percent (±0.8 percent) above the revised August estimate of $789.7 billion.
- Residential construction was at a seasonally adjusted annual rate of $394.7 billion in September, 1.9 percent (±1.3 percent) above the revised August estimate of $387.5 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $399.5 billion in September, 0.7 percent (±0.8 percent) below the revised August estimate of $402.2 billion.
“Core construction spending grew at a record-setting 28 percent annual rate in the second quarter (data started in 1993), contributing 1.4 percentage points to second quarter GDP growth,” said Patrick Newport, U.S. economist, IHS Global Insight. “Its third-quarter contribution was 0.4 percent – solid but far from spectacular. Core construction spending, which currently accounts for just under 5 percent of GDP, feeds the construction numbers in the national income accounts.
“Single-family and multifamily combined increased 2.0 percent in September,” Newport said. “For the quarter, they were up a solid 16.6 percent (annualized), up from 5.5 percent in the second. Spending on new residential structures remains depressed by historical standards. Still, this sector is making steady positive contributions to economic growth.
“Nonresidential construction, which grew at a spectacular 42.8 percent annual rate in the second quarter as spending on manufacturing plants soared, slowed to 3.3 percent in the third, dragged down by declines in spending on communications, religious, commercial and electric power structures,” Newport continued. “Spending remains steady almost across the board with 8 of 11 categories up more than 10 percent from year-ago levels.
“Public construction also caught fire in the second quarter, increasing at a 30.8 percent annual rate – and, like its private nonresidential counterpart, slowed sharply in the third – to a 7.8 percent rate,” Newport concluded. “For September, spending was up 0.7 percent month-on-month and 9.4 percent year-on-year.”