Construction Spending Falls For Second Month

Construction spending fell to an annual rate of $837.1 billion in August, down for the second consecutive month since peaking in June. The rate remains 6.5 percent above August 2011's reading.

Construction spending declined 0.6 percent between July and August to an annualized rate of $837.1 billion, according to the latest numbers from the U.S. Census Bureau.

Total construction spending declined 0.6 percent for the month, but was up 6.5 percent from August 2011 to August 2012. The 0.6 percent drop, the biggest decrease since July 2011, followed a revised 0.4 percent decline in July that was smaller than previously estimated.

Private residential spending continues to strengthen, increasing by 0.9 percent compared to July and gaining 17.8 percent during the past 12 months. Private nonresidential construction was up 7.2 percent for the year, but declined by 1.7 percent for the month. Public construction slid further, declining 0.8 percent in August and 3.5 percent year-over-year.

''The construction industry has definitely lost some of the momentum it had earlier this year,'' said Stephen Sandherr, CEO of the Associated General Contractors of America, in a statement. Sandherr noted that construction spending has declined for two months in a row. ''With the exception of the lodging sector, many businesses are retreating from the levels of construction spending we saw in the spring and early summer.''

Within the private sector, multi-family construction experienced the largest monthly and annual gains, increasing by 3.7 percent for the month and 44.8 percent for the year. Single-family construction also surged, up 2.8 percent for the month and 20.8 percent for the year. In the private nonresidential sector, lodging and education experienced the highest rate of annual growth, up 33.7 and 22 percent year-over-year respectively even as spending declined by 0.1 and 0.9 percent for the month.

Manufacturing construction also declined for the month, down 0.7 percent, yet remains 6.1 percent higher compared to August 2011.