WASHINGTON – Construction spending nationwide edged up 0.3 percent last month to a seasonally adjusted annual rate of 1.163 trillion per year, 0.3 percent above the revised August rate of $1.159 trillion per year, the U.S. Census Bureau said in a report today. Compared with the September 2006 rate of $1.172 trillion, construction spending fell 0.8 percent.
The monthly increase was the first in four months, the bureau said, after revisions erased a previously reported 0.2-percent August increase, leaving that month’s estimate 0.2 percent below the July construction spending rate in July.
Analysts had expected spending to decline 0.5 percent last month from the initial August estimate, based on the median forecast from a survey of 52 economists by Bloomberg News. (Their estimates ranged from a 1.0-percent decline to a 0.1 percent gain.)
Demand for factories, office buildings and government construction continued to offset the slump in housing. Nonresidential construction spending – public and private – grew by 1.8 percent in September to a seasonally adjusted rate of $644.0 billion per year, while total residential construction fell 1.4 percent to a rate of $581.8 billion per year.
“I don’t think you have reached the point where nonresidential has turned down,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, told Bloomberg News. “I think that’s a next-year phenomenon.”
Total private construction fell 0.2 percent to $869.0 billion per year, as a 1.5-percent increase in nonresidential construction to $357.7 billion per year was more than offset by a 1.4-percent decline in residential construction to $511.4 billion.
Total public construction rose 1.9 percent to a rate of $293.8 billion per year, led by a 9.1-percent increase in conservation and development projects, an 8.0-percent increase in power projects, a 4.7-percent increase in sewage and waste-disposal work and a 3.0-percent increase in transportation projects. Spending on water-supply projects rose 2.5 percent compared with August while education-related construction increased 2.3 percent. Public residential construction fell 5.1 percent in September, however, and health care construction fell 0.8 percent.
Additional information is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov.
