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US: Construction Spending
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.1% | -0.2% to 0.6% | -0.5% | -0.1% | 0.0% |
| Year over Year | -3.8% | -3.2% | -3.1% |
Highlights
The dollar value of construction put in place is down 0.5 percent in July from June after a flat reading in the prior two months. The decrease in July is below the consensus of up 0.1 percent in the Econoday survey of forecasters. Private sector construction spending is down 0.5 percent in July from the prior month and public construction is down 0.2 percent in July. Construction spending is down 3.8 percent in July from a year ago. Overall construction spending has not risen on a year-over-year basis since July 2025.
Private residential construction spending is 1.3 percent lower in July from June with spending on single family homes down 3.2 percent and multi-units up 0.2 percent. Spending on home renovation and repair is up 0.3 percent in July from the prior month and accounted for 40.6 percent of all private residential construction spending. The market may be weak for new single family homes, but builders are erecting the sorts of multi-unit properties that are more affordable, especially to entry-level homebuyers. Current homeowners continue to reinvest in their homes. Construction spending on private single family homes is down 6.5 percent from a year ago, multi-units are down 0.9 percent, and is 10.2 percent lower on home improvement.
Private nonresidential spending is down 0.5 percent in July from June and down 5.5 percent compared to a year ago. Spending on manufacturing construction in the largest industries is up 0.5 percent for power, down 0.2% for highway and streets, down 1.0 for manufacturing, up 2.9 percent for offices, and flat for commercial buildings.
Public spending is 0.2 percent lower in July from June but up 1.7 percent from July 2025.
Market Consensus Before Announcement
Another marginal 0.1 percent increase is the call for July.
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.
