Construction spending rose slightly in August from the previous month’s level, but posted a double-digit gain year over year, the U.S. Census Bureau has reported.
The Census Bureau’s report for August, released on Oct. 1, showed that the value of finished construction edged up 0.7% from July, to a seasonally adjusted $1.086-trillion annual rate. Compared with the year-earlier level, August’s rate jumped 13.7%.
Residential construction put in place in August was up 1.3% from July to a $389.9-billion rate and increased 16.4% year over year.
Nonresidential projects recorded an 0.3% month-to-month increase, to a $696.3-billion rate. The total was up 12.3% from the August 2014 level, said the Census Bureau, which is part of the Commerce Dept.
Ken Simonson, Associated General Contractors of America's chief economist, observed that the overall August total was the highest since May 2008 and the 13.7% increase was the largest since March 2006.
At the Associated Builders and Contractors, which concentrates on nonresidential construction, Chief Economist Anirban Basu said in a statement, "Job growth is fueling both consumer spending and the absorption of space, all of this is good for construction spending."
But Basu cautioned that the economy faces risks, incluidng likely increases in interest rates.
Among key segments, manufacturing soared 57.6% from its year-earlier mark, to a rate of $92.6 billion. That number was up a modest 1.3% from July.
The power segment, whose comparisons can be skewed by individual megaprojects, was up 1.2% from July to a $92-billion rate, but fell 6.7% from August 2014. It was one of just two segments—religious facilities was the other—that were down year over year.
Educational work declined 0.6% month to month, to a $85.5-billion rate but rose 5% from the year-earlier rate.
Highway and street construction dipped 0.6% from July, to a rate of $90.7 billion, but moved up 7% year over year.
AGC's Simonson said in a statement, "There has been exceptionally strong growth in manufacturing, lodging and apartment construction all year." He added, "More recently, office, health care, highway and educational structures have rebounded as well."