The Census Bureau said that construction spending fell 0.6 percent in August, extending the 0.4 percent decline of July. The decreased stemmed entirely from weaknesses in the nonresidential sector, which was off 1.3 percent. Residential construction grew 0.9 percent for the month, building on its rebound over the past year. In fact, residential construction spending is up 16.1 percent since August 2011.
Manufacturing spending peaked at an annualized $49.4 billion in May. Since then, it has declined for three straight months, with August spending of $46.9 billion at the annual rate. The August decrease was 0.7 percent. Nonetheless, manufacturers have increased their investments in construction projects over the course of the past year overall, with year-over-year growth of 6.1 percent.
Other nonresidential sectors with decreases in the month of August include communications (down 3.7 percent), power (down 3.7 percent), commercial (down 1.3 percent), religious (down 1.2 percent), and educational (down 0.9 percent). Only two major sectors had gains in the nonresidential data: amusement and recreation (up 1.2 percent) and transportation (up 0.2 percent).
Public construction spending was also lower, down 0.9 percent for the month and down 2.7 percent year-over-year. Among the weakest areas for public construction spending in August were amusement and recreation (down 4.3 percent), educational (down 3.4 percent), conservation and development (down 3 percent), office (up 2.9 percent), and transportation (down 1.6 percent). Public construction spending was higher, though, for commercial (up 4.6 percent), public safety (up 3.2 percent), health care (up 3 percent), sewage and waste disposal (up 2.7 percent), and power (up 2.6 percent) projects.
Chad Moutray is chief economist, National Association of Manufacturers.
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