Construction spending was at a seasonally adjusted rate of $1.318 trillion in August 2018, according to a report published by the Census Bureau. The spending saw a modest gain of 0.1% compared a month earlier and 6.5% compared to a year earlier (see the interactive treemap below).
Private sector residential construction, which accounted for the largest (41.7%) of the total spending, had a monthly drop 0.7% in August. When considered annually, it showed a gain of 4.0% compared to a year earlier. The construction spending on new multi-family residential dropped 1.7% in August (0.6% annually), new single-family decreased by 0.7% (up 4.1% annually), and residential improvement gained 0.6% (5.3% annually).
Private non-residential construction accounted for 34.3% of the total spending. The spending slipped 0.2% for the month but registered a gain of 4.8% for the year. The spending on Power, the largest category in this group, was down 1.3% for the month but up 6.2% for the year. Commercial construction spending, a close second, was down 0.9% for the month and up 3.1% for the year. Office construction, the third largest category in this group, saw one of the largest gains in the group for the year (12.6%) and was also up 0.8% for the month. Transportation had the largest gains in this group at 19.9% annual gain (and 1.3% monthly)
With a seasonally adjusted rate of $326.7 billion, public construction spending accounted for 24.0% the total spending. The spending jumped 2.0% for the month and was reported to be the highest level since July 2009. It was up 14% for the year and accounted for almost half of the total gain for the year. The three largest categories in this group performed as follows: Highway & Street was up 1.7% for the month and 13.9% for the year. Educational was up 1.0% for the month (3.55% for the year). Transportation was down a bit (0.7%) for the month but witnessed one of the largest annual gains (24.2%) in the group.
The interactive treemap above summarizes these findings. How do you see the construction spending trends in your region and how is it affecting your business? Do you see the same trend as seen nationally or is your region’s construcion spending is skewed in favor of one or more of these categories?