Construction Spending Fell 0.4% in September, Still Up Year to Date

Arlington, VA, November 2, 2016—Construction spending in September totaled $1.150 trillion at a seasonally adjusted annual rate, down 0.4% the month before and down 0.2% from the September 2015 level, according to the Associated General Contractors of America. The year-to-date total for January through September 2016 compared to the first nine months of 2015 remains positive, with an overall increase of 4.4% despite a deterioration in public spending, thanks to gains in private nonresidential and residential spending.

Public construction spending declined 0.9% from a month before—the sixth decrease in the past seven months—bringing the year-to-date total for the first nine months of 2016 down 2.2% from the same period in 2015. Public educational spending rose 3.8% year-to-date but public infrastructure spending declined across-the-board. Public spending on highway and street construction slipped 0.7%; other transportation facilities such as transit and airports dropped 4.8%; sewage and waste disposal slumped 8.9%; water supply fell 8.3%; and conservation and development declined 4.5%.

Private nonresidential construction spending decreased 1.0% for the month but is up 7.8% year-to-date. The largest private nonresidential segment in September was power construction (including oil and gas pipelines), which declined 1.4% for the month but is up 7.4% year-to-date. The next-largest segment, manufacturing, dropped by 1.5% for the month and is down 2.5% year-to-date. Commercial (retail, warehouse and farm) construction decreased by 2.4% in September but climbed 8.6% year-to-date. Private office construction slipped 0.4% for the month but soared 27% year-to-date.

Private residential construction spending increased by 0.5% between August and September and rose 5.8% year-to-date. Spending on multifamily residential construction increased by 2.0% for the month and 18.8% year-to-date, while single-family spending inched up 0.1% for the month and rose 6.0% year-to-date.

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