Construction Spending: Sharp Increase Amid Anemic Trend

Bottom Line: Construction rose moderately in October, with gains/declines in public construction. Public construction accelerated sharply in the last 3 months to put overall construction spending modestly above its year ago levels with the trend showing some signs of acceleration. Homebuilding increased modestly, and is now moderately above its year ago levels - but the pace of those gains is well below those seen in 2016 and 2015. Meanwhile, non-residential construction increased last month but is still contracting when looking at the last 3-, 6- and 12-month averages. Construction Spending ROSE by 1.4% in October, compared with market expectations for an increase of 0.5%. The September estimate was unchanged while the August, estimate was revised modestly higher from 0.1% to 0.5%. Construction spending is now 2.9% ABOVE its year ago level but still 0.0% below its March 2006 peak. Residential Construction ROSE by 0.4%, Homebuilding is now 7.4% ABOVE its year ago level. Nonresidential Construction ROSE by 0.9%. Nonresidential construction growth is now 1.3% BELOW its year ago level. Public Construction ROSE by 3.9%, and is now 1.8% ABOVE its year ago level.