The value of construction put in place is up 0.7 percent in July after rising 0.6 percent in June. The July change is above the consensus of up 0.5 percent in the Econoday survey of forecasters. The increase is mainly due to a 1.4 percent increase in residential construction, the third straight gain. Nonresidential construction ekes out a 0.1 percent increase while public construction is down 0.4 percent.

Construction of new single-family homes is up 3.1 percent in July from the prior month and multi-unit construction is up 0.2 percent. The value of single-family construction is up for the third month in a row while multi-unit buildings have not seen a decline since July 2022. Home renovation and repair total private residential less single- and multi-units was unchanged in July from June. In July, home renovation and repair accounted for 40.3 percent of all private residential construction spending.

Private nonresidential construction spending is up 0.5 percent in July from June. Spending continues strong for manufacturing which is up 1.1 percent month-over-month and is 71.4 percent higher than a year ago.

Public construction is weaker on a mixed performance. The largest category of highway and streets is down 0.6 percent in July from June, but up 12.1 percent compared to a year ago.

Construction spending for July is expected to rise 0.5 percent to match June's 0.5 percent increase that benefited from a second strong month for residential spending.

The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars.

Construction spending has a direct bearing on stocks, bonds and commodities because it is a part of the economy that is affected by interest rates, business cash flow and even federal fiscal policy. In a more specific sense, trends in the construction data carry valuable clues for the stocks of home builders and large-scale construction contractors. Commodity prices such as lumber are also very sensitive to housing industry trends.

Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.

A portion of construction spending is related to government projects such as education buildings as well a highways and streets. While investors are more concerned with private construction spending, the government projects put money in the hands of laborers who then have more money to spend on goods and services.

On a technical note, construction outlays for private residential, private nonresidential, and government are key inputs into three components of GDP--residential investment, nonresidential structures investment, and the structures portion of government expenditures.

That is why construction spending is a good indicator of the economy's momentum.