Construction spending increased 0.5% from August to September but is down 0.9% compared with September 2018, according to www.abc.org.
For public construction, spending increased 1.5% for the month and 6.6% year-to-date. Private residential construction rose 0.6% for the month but decreased 7.9% year-to-date. Private nonresidential spending fell 0.3% from August to September and 5.7% year-to-date.
“Construction spending contracted in a number of private segments, including in the commercial and lodging categories,” says Anirban Basu, chief economist for Associated Builders and Contractors. “While it would be easy to attribute this to a slowing economy and/or growing concerns regarding the saturation of available space in certain private segments, there are also large-scale economic transformations playing a role. Commercial construction spending is down nearly 19% as traditional retailers continue to contend with the growing presence and capabilities of e-commerce giants, while those in the lodging segment—which dipped in September and is essentially flat year-over-year—are increasingly competing with online platforms such as Airbnb.
“Meanwhile, public construction remains one of the strongest elements of the U.S. economy,” Basu continues. “Spending in the water supply category surged nearly 6% in September and is up 20% on a year-over-year basis. Overall, public nonresidential construction is up nearly 7% over the past 12 months as state and local government finances enjoy their best health in more than a decade. While there were some declines on a monthly basis in certain public segments in September, year-over-year spending is up more than 6% in the highway/street category, by nearly 6% in the transportation segment and by nearly 9% in the public safety category.”
