US construction spending rises in September
US CONSTRUCTION spending increased in September, but momentum is slowing as the factory building boom fades.
The Commerce Department said on Wednesday (Nov 1) that construction spending rose 0.4 per cent. Data for August was revised higher to show construction spending surging 1.0 per cent instead of rising 0.5 per cent as previously reported. Economists polled by Reuters had forecast construction spending climbing 0.4 per cent.
Construction spending shot up 8.7 per cent on a year-on-year basis in September. Spending on private construction projects rose 0.4 per cent after advancing 1.0 per cent in August. Outlays on private non-residential structures like factories edged up 0.1 per cent.
Spending on manufacturing construction projects fell 0.4 per cent. Factory construction surged amid efforts by President Joe Biden’s administration to bring semiconductor manufacturing back to the US.
Investment in residential construction increased 0.6 per cent after rising 1.3 per cent in the prior month. Spending on new single-family construction projects soared 1.3 per cent. An acute shortage of previously owned homes on the market is boosting new construction, but with the rate on the popular 30-year fixed mortgage flirting with 8 per cent, scope for further gains is limited.
Outlays on multi-family housing projects dipped 0.1 per cent in September. This housing segment could struggle to eke out gains as the stock of multi-family housing under construction is near record highs. The rental vacancy rate jumped to its highest level in 2-1/2 years in the third quarter.
SEE ALSO
Spending on public construction projects rose 0.4 per cent after gaining 0.9 per cent in August. State and local government spending increased 0.9 per cent while outlays on federal government projects dropped 5.3 per cent. REUTERS
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