The value of construction put in place is up 0.6 percent in October after a downward revision to up 0.2 percent in September. Construction spending is up 10.7 percent from October 2022. The consensus in the Econoday survey of forecasters is lower than the change in October at up 0.3 percent. Despite rising mortgage rates, spending on residential construction remains strong in part due to lean supplies of existing homes to purchase.

Spending on private residential construction is up 1.2 percent in October from September. Spending on construction of new single-family homes is up 1.1 percent. Shortages of affordable homes to buy are particularly acute in this segment of the housing market and builders are moving in to fill the gap. Spending on multi-family homes is down 0.2 percent, a small decrease for a second month in a row as homebuilders shift their focus to single-family units. Spending on home improvements total private residential spending less that for single- and multi-family units is up 2.0 percent in October from the prior month. Those current homeowners who have low mortgage rates are spending on renovations and repairs rather than give up their current mortgage situation.

Nonresidential spending is up a scant 0.1 percent in October as gains are nearly offset by decreases. One segment of nonresidential spending that continues to increase is manufacturing where the gain is 0.9 percent month-over-month and up 71.2 year-over-year. Manufacturers are investing and reinvesting in infrastructure.

Total private construction is up 0.7 percent in October from September with most of that due to strength in residential building. Public construction is up 0.2 percent in October from the prior month.

Construction spending has yet show much effect from rising financing rates. After rising an as-expected 0.4 percent in September, spending in October is expected to rise another 0.3 percent.

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.