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Monday, November 3, 2014

Construction Spending Unexpectedly Declines In September

Construction outlays unexpectedly declined in September on public outlays and somewhat on the private nonresidential component. Private residential spending was a positive for the month. . Construction spending declined 0.4 percent in September after a 0.5 percent decrease in August. Market expectations were for a 0.6 percent boost.

September's decrease was led by public outlays which fell 1.3 percent after a 1.0 percent drop in August. Private nonresidential spending dipped 0.6 percent, following an easing of 0.3 percent the month before.

On a positive note, private residential construction spending rebounded 0.4 percent, following a decrease of 0.3 percent in August. And strength was in the new one-family component which advanced 1.1 percent in September, following a 1.2 percent gain the month before.

On a year-ago basis, total outlays were up 2.9 percent in September compared to 4.4 percent in August.

The latest construction outlays report probably will shave off estimates by analysts for third quarter GDP-although it still remains moderately positive over all.


Recent History Of This Indicator:
Construction spending unexpectedly reversed course in the wrong direction in August. Construction spending declined 0.8 percent in August after a 1.2 percent rebound in July. August's decrease was led by the private nonresidential sector-down 1.4 percent, following a 1.3 percent increase in July. Public spending fell 0.9 percent in August after jumping 2.1 percent the prior month. Private residential outlays eased 0.1 percent, following a 0.4 percent boost in July. Looking at detail, the private residential component was actually favorable. Weakness was in residential excluding new homes, which are largely improvements. This subcomponent fell 2.0 percent after edging up 0.2 percent in July. On the plus side, new one-family outlays advanced 0.7 percent in August, following a 0.8 percent increase the prior month. New multifamily outlays rebounded 1.4 percent after a 0.5 percent dip in July. New private residential outlays were moderately healthy on average over the last two months. On a year-ago basis, total outlays were up 5.0 percent in August, compared to 6.9 percent in July.

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