Both Residential and Nonresidential Chip In
Total outlays for construction grew by 0.5% in September, with single-family home building showing a strong, recent improvement. For the year however, total construction spending is off 2.2% compared to the first nine months of 2018.
Residential spending advanced 0.6% month-to-month, which the Wells Fargo Economics group labeled as "solid" and called that sector "the clear standout in recent months," due to three consecutive monthly gains. Single-family construction rose 1.3% in each of those months.
"Lower financing costs, better weather and improved buying conditions have given homebuilders confidence to move forward with projects that had been sidelined," stated the economics group.
Outlays on multifamily units are 5.6% higher year-to-date but are starting to moderate as evidenced by this sector's 0.7% decline in September.
In the private nonresidential construction sector, spending decreased 0.3% for the month, adding to its 5.9% drop over a three-month annualized basis. One of the biggest letdowns is commercial construction, which while only dipping 0.8% month-to-month, is off 20% year-to-date. The power and lodging sectors also posted monthly losses as the office, educational, healthcare and manufacturing sectors experienced gains between 0.3% and 1.4%.