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Construction spending hits four-year high in October

An unusual surge in public construction in October pushed total construction spending to its highest level since May 2009 despite a dip in both private residential and non-residential activity, according to an analysis of new Census Bureau data by the Associated General Contractors of America.

“Nearly every category of public construction increased in October, according to the preliminary Census figures, although for the first 10 months of 2013 combined, public spending continues to lag the 2012 year-to-date total,” the association's chief economist Ken Simonson said in a statement. “Meanwhile, residential spending slipped for the month, but still showed strong year-to-date gains, and nonresidential spending remained stuck in neutral.”

Construction put in place in October totaled $908 billion, 0.8 percent higher than in September. But figures for August and July were revised down below levels that initially exceeded the current October estimate. The total for the first 10 months of 2013 was 5 percent above the year-to-date mark for the same months in 2012.

Public construction spending jumped 3.9 percent for the month, but trailed the 2012 year-to-date total by 2.8 percent. The two largest public components were mixed: highway and street construction increased 0.6 percent in October and 0.3 percent year-to-date, while educational construction leaped 8.5 percent for the month but fell 8.5 percent year-to-date, Simonson said.

Private residential spending slid 0.6 percent for the month, but still climbed 17 percent year-to-date. New single-family construction decreased 0.6 percent in October, but soared 30 percent in the first 10 months of 2013 compared with 2012. New multifamily spending advanced 2.2 percent in October and 46 percent year-to-date.

“Construction will likely display varied patterns in the next several months,” Simonson said. “Multifamily construction will keep burgeoning, but single-family homebuilding may stall. Private nonresidential spending should benefit from more power, energy and manufacturing work. Public construction remains threatened.”

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