MDM provides a synopsis of construction spending trends each month, with a look at the segments of construction that gained and lost during the month.
Summary
Construction spending in October 2013 increased 0.8 percent from September and increased 5.3 percent from October 2012. Here is the breakdown:
- Private residential construction spending was down 0.6 percent from September and increased 17.8 percent year-over-year.
- Private nonresidential construction spending was down 0.5 percent from September and decreased 3.4 percent year-over-year.
- Public construction spending was up 3.9 percent from September and increased 2.3 percent year-over-year.
The October 2013 data was released December 2.
Analysis
According to a press release from the Associated General Contractors of America, "An unusual surge in public construction in October pushed total construction spending to its highest level since May 2009 despite a dip in both private residential and nonresidential activity." Ken Simonson, the association's chief economist, said although nearly every category of public construction increased in October, public spending continues to lag the 2012 year-to-date total.
Associated Builders and Contractors Chief Economist Anirban Basu said spending was hindered by a combination of elevated uncertainty and the delayed procurement caused by the government shutdown.
According to Simonson: "Residential spending slipped for the month but still showed strong year-to-date gains, and nonresidential spending remained stuck in neutral."
Forecast
"Construction will likely display varied patterns in the next several months," Simonson said. "Multifamily construction will keep burgeoning, but single-family homebuilding may stall. Private nonresidential spending should benefit from more power, energy and manufacturing work. Public construction remains threatened."
Basu said nonresidential construction spending could regain a certain degree of momentum during the months ahead, "though the long-anticipated acceleration in spending is unlikely to occur until after the first quarter of 2014.”
Segment Trends
According to Census Bureau data, the following construction segments overall had the greatest gains or declines in spending in October 2013 from October 2012. It is not broken out by private vs. public sectors.
Winners: Largest Gains from October 2012
Lodging: +17.5%
Residential: +17.4%
Water supply: +14.35%
Highway and street: +9.3%
Transportation: +5.8%
Losers: Largest Losses or Smallest Gains from October 2012
Communication: -16.1%
Power: -15.1%
Religious: -12.6%
Conservation and development: -7.2%
Office: -2.7%
