Value of New Construction Shows Small Increase in August But Still Solid Over 2014

The U.S. Department of Commerce said construction spending during Aug. 2015 was estimated at a seasonally adjusted annual rate of $1,086.2 billion, 0.7% above the revised July estimate of $1,079.1 billion, 13.7% above the August 2014 estimate of $955.0 billion. During the first eight months of this year, construction spending amounted to $683.4 billion, 9.8% above the $622.4 billion for the same period in 2014.

Private construction. Spending on private construction was at a seasonally adjusted annual rate of $788 billion, 0.7% above the revised July estimate of $782.3 billion. Residential construction was at a seasonally adjusted annual rate of $383.3 billion in August, 1.3% above the revised July estimate of $378.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $404.7 billion in August, 0.2% above the revised July estimate of $403.8 billion.

The Office (+27.7%), Lodging (+43.2%) and Healthcare  (+15.2%) market segments continuing to lead the parade in private construction spending, with each enjoying double-digit year-over-year (YOY) increases. The Power construction segment is lagging with a 8.8% year-over-year decrease. Construction of electrical plants is particularly soft with a -20.6% YOY decline.

Public construction. In August, the estimated seasonally adjusted annual rate of public construction spending was $298.2 billion, 0.5% above the revised July estimate of $296.8 billion. Educational construction was at a seasonally adjusted annual rate of $67.4 billion, 0.2% below the revised July estimate of $67.5 billion.