| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.2% | -0.3% to 0.5% | 0.4% | 0.1% | |
| Year over Year | 5.0% | 4.6% | 5.3% |
Highlights
The value of construction put in place is up 0.4 percent in October from September after an unrevised up 0.1 percent in September from August. The October increase is above the consensus of up 0.2 percent in the Econoday survey of forecasters. Construction spending is up 5.0 percent from the year ago month. The October increase reflects a 1.5 percent increase in spending on residential building while nonresidential is down 0.4 percent.
Total spending on private residential construction is up 1.5 percent in October with gains of 0.8 percent in new single-family homes and up 0.2 percent in multiunit projects. Homeowners are also spending on home upgrades and repairs. The calculation for spending on home improvement (total private residential less single- and multi-unit spending) shows an increase of 2.7 percent in October. Some of this may be related to storm recovery after Hurricanes Helene and Milton.
Total spending on private nonresidential construction is down 0.3 percent in October. Declines are broad-based. Notable is that the largest two sectors did not decline. Spending on manufacturing is essentially unchanged and power plants is up 0.2 percent in October. The third largest category is commercial properties, which is down 1.1 percent.
Spending on public construction is down 0.5 percent in October from September. The performance is mixed across categories with the two largest declining. Spending highways and streets is down 0.7 percent and educational is down 0.4 percent.
Total spending on private residential construction is up 1.5 percent in October with gains of 0.8 percent in new single-family homes and up 0.2 percent in multiunit projects. Homeowners are also spending on home upgrades and repairs. The calculation for spending on home improvement (total private residential less single- and multi-unit spending) shows an increase of 2.7 percent in October. Some of this may be related to storm recovery after Hurricanes Helene and Milton.
Total spending on private nonresidential construction is down 0.3 percent in October. Declines are broad-based. Notable is that the largest two sectors did not decline. Spending on manufacturing is essentially unchanged and power plants is up 0.2 percent in October. The third largest category is commercial properties, which is down 1.1 percent.
Spending on public construction is down 0.5 percent in October from September. The performance is mixed across categories with the two largest declining. Spending highways and streets is down 0.7 percent and educational is down 0.4 percent.
Market Consensus Before Announcement
Forecasters expect another modest increase in construction spending, up 0.2 percent in October.
Definition
The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars.
Description
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.
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.
