Construction Spending: Modest Improvement

Bottom Line: Construction spending remains a source of concern for economic growth. Flat in September, construction spending was modestly better than previous reported for August. Residential construction rebounded in September but continued to decelerate relative to the longer-term trend. The public sector, where we saw weakness in '16 and '17 has been the lone bright spot within construction this year but saw declines in September. Overall, construction is decelerating but the pace of gains now appears modestly better than previously reported with the upward revision to August. Construction Spending ROSE by 0.05% in September, in-line with market expectations. The August estimate was revised modestly higher from 0.10% to 0.85%, while the July estimate was unchanged. Construction spending is now 7.2% ABOVE its year ago level. Residential Construction ROSE by 0.6%, Homebuilding is now 5.1% ABOVE its year ago level. Nonresidential Construction ROSE by 0.1%. Nonresidential construction growth is now 7.2% ABOVE its year ago level. Public Construction FELL by 0.9%, and is now 11.0% ABOVE its year ago level.