Construction Spending Up in August From Year-Earlier Level
Construction spending rose 5% in August on a year-over-year basis, to a $961-billion annual rate, the Commerce Dept. has reported.
But Commerce’s latest monthly report on construction put in place, released on Oct. 1, also showed that August’s construction volume declined 0.8% from July's rate.
The report, from Commerce's Bureau of the Census, said that August’s private construction spending increased 6.3% from August 2013 and public construction was up 1.9%.
The strongest major industry sectors in August, compared with year-earlier figures, included power, up 16.3% to an annual rate of $102.2 billion; offices, up 18.9% to a $44.2-billion rate; and manufacturing, which rose 14.5% to a rate of $57 billion.
Several segments dipped in August, including highways and streets, down 0.2% from August 2013, to an $83.3-billion rate; and communication, which declined 10.5% to a rate of $15.9 billion.
All of those figures are adjusted for seasonal variations.
Ken Simonson, Associated General Contractors of America chief economist, said that although total construction spending has been on the upswing in the past 12 months “the gains remain uneven.”
He added, “The industry appears likely to experience very mixed results by segment and region for the rest of 2014 and into next year.”
Anirban Basu, Associated Builders and Contractors chief economist, focusing on nonresidential construction, said, "After a significant acceleration in spending in July, August’s report depicts a steady but unspectacular recovery.”
Basu said, “This is why it is never a good idea to get excited about one month’s data.”
McGraw Hill Construction’s latest report on construction starts, released on Sept. 19, sketched a similar pattern, saying volume totaled $361.4 billion for the first eight months of 2014, up 4% from the same period last year. Those numbers were not seasonally adjusted.
McGraw Hill Construction (MHC) also said that August’s seasonally adjusted total of $540.6 billion was down 9% from July’s level. (ENR is part of McGraw Hill Construction.)
