The Census Bureau said that manufacturing construction spending rose 1.5 percent in August, increasing for the fifth straight month. Manufacturers have continued to edge their construction dollars higher since bottoming out at $46.84 billion at the annual rate in March. Manufacturing construction rose from $55.47 billion in July to $56.31 billion in August, with year-over-year growth of 14.9 percent. This indicates that manufacturers are stepping up their investments in new structures, which is consistent with the recent pickup in demand and output.
Meanwhile, total construction spending fell 0.8 percent in August, pulling back from the 1.2 percent gain observed in July. Both private and public sector spending were lower for the month, down 0.8 percent and 0.9 percent, respectively. Private, nonresidential construction activity was off 1.4 percent. In addition to manufacturing, other areas with higher levels of spending in August were communication (up 3.6 percent), educational (up 1.4 percent), religious (up 0.9 percent) and lodging (up 0.4 percent) projects. However, these were offset by declines for power (down 3.9 percent), amusement and recreation (down 3.7 percent), commercial (down 3.5 percent), and transportation (down 2.0 percent) firms, among others.
It should be noted that the year-over-year data for private, nonresidential construction spending, which has risen 9.2 percent over the past 12 months. The top five areas for growth in the past year were office (up 18.6 percent), power (up 17.2 percent), manufacturing (up 14.9 percent), commercial (up 10.2 percent) and lodging (up 9.7 percent) construction projects.
Public, nonresidential construction spending was off 1.0 percent for the month but has increased 2.3 percent over the past 12 months. Some bright spots at the public sector level year-over-year include office (up 20.2 percent), conservation and development (up 18.3 percent), amusement and recreation (up 16.2 percent), power (up 9.9 percent), sewage and waste disposal (up 4.7 percent), transportation (up 3.2 percent) and educational (up 2.9 percent) endeavors.
Chad Moutray is the chief economist, National Association of Manufacturers.