Economy Watch: Construction Spending Edges up in October

Most of the month's gain was in the nonresidential construction sector, as multifamily construction spending dropped in October, according to the U.S. Census Bureau's latest report.

Source: U.S. Census Bureau, Monthly Construction Spending, October 2017
Source: U.S. Census Bureau, Monthly Construction Spending, October 2017

U.S. construction spending during October came in at an annualized rate of about $1.24 trillion, or 1.4 percent above the revised September estimate of $1.22 trillion, the Census Bureau reported on Friday. The October 2017 figure is also 2.9 percent above the October 2016 total of $1.20 trillion.

Most of the gain for the month was in nonresidential construction spending, which was up 2.1 percent compared with September. Compared with October 2016, however, nonresidential spending was completely flat, neither gaining nor losing ground.

Spending on office construction projects surged for the month, up 5.3 percent compared with September. But compared with last year, less is being spent on building office space—construction spending year-over-year in the sector dropped 3.4 percent. Spending on new hotel construction was up 2.1 percent for the month and 12.3 percent for the year.

On the residential side, multifamily construction spending dropped 1.6 percent for the month in October, and was down 2 percent for the year. Single-family residential construction spending did better: for the month, it was up 0.3 percent, and for the year, the gain was 8.9 percent.