Construction spending edged up in October from September’s level and posted a stronger year-over-year gain, the Commerce Dept.’s Bureau of the Census has reported.
The bureau’s latest monthly report on the value of construction put in place, released on Dec. 1, said October’s estimated annual rate was $1.173 trillion, an 0.5% increase from the previous month and a 3.4% rise from October 2015.
The report also said October nonresidential construction dipped 0.3% from the previous month, to a $699.7-billion annual rate, but rose 2.6% from the year-earlier level.
Eight of the 16 nonresidential segments experienced month-to-month upticks, including educational facilities, which rose 2.3% to a $92.4-billion rate; transportation, up 2.2% to $42.2 billion; and highways and streets, up 1.9% to $91.7 billion.
In the minus column were power, the largest nonresidential sector, which was down 3.8%, to a $92.4-billion rate; health care, which was off 3.1%, to $41.4 billion; and manufacturing, which declined 2.7%, to $73.9 billion.
Looking at year-over-year comparisons, “Certain segments are red hot,” said Anirban Basu, Associated Builders and Contractors chief economist. They include office buildings, which surged 24.8%, to $70.7 billion; and lodging, which jumped 20.9%, to $27.4 billion.
Sectors that dropped from year-earlier levels included sewage and waste disposal, off 12.2%, to $21.2 billion; and water supply, down 10.8%, to an $11.9-billion rate.
Residential construction moved up 1.8% for the month and 4.6% year over year, to a $472.9-billion annual rate, the Census Bureau said.
The report said private construction slipped 0.2% from September, to an $885.9-billion annual rate but was up 4.7% from October 2015’s rate, the report said.
Public-sector construction posted a 2.8% monthly increase, to a $286.8-billion annual rate, but declined 0.6% year over year.
Ken Simonson, Associated General Contractors chief economist, said in a statement, "It's encouraging to see a rebound in public construction in recent months, but most infrastructure categories are down substantially over the past year."
He added, "Meanwhile, private nonresidential construction still appears to have good prospects, assuming the economy continues to expand."
ABC’s Basu said in a statement that the election results, which mean Republicans will control the White House, Senate and House, indicate that “a meaningful infrastructure package may be more likely.” But he cautions that wouldn’t affect spending in the near term.