Construction Spending Slows, Still Increases in September
Construction spending continued to increase in September, but outlays have slowed slightly. Total construction spending increased 0.3% in September compared to August, according to this week's release from the Census Bureau. Spending is also above September 2019 by 1.5%. However, the improvement slowed from August 2020 when spending increased by 0.8%. Total spending is up 4.1% for the first nine months of 2020 compared to the same period in 2019.
Private construction spending inched forward less than a percent, and public construction spending was 1.7% below the August rate. Total residential spending jumped more than 10% from September 2019, but nonresidential spending was down 4.4% from the prior year.
While residential spending increased nearly 3% from August, nonresidential spending dropped 1.6%, which is the fourth straight decline. "Sluggish demand for commercial space and heightened economic uncertainty continues to weigh heavily on most commercial and institutional construction," states a release from Wells Fargo Securities.
This is the best month of September on record, dating back to 2002.
-Michael Miller, managing editor