Construction Spending Rebounds in August. July Revised Lower

by devteam October 1st, 2009 | Share

Total construction spending jumped in August but any optimism from the fresh data was offset by downward revisions to the prior month.

The construction sector improved by 0.8% in August, in contrast to expectations that it would fall 0.1%. But spending in July fell by a whopping 1.1% in the new estimates, compared to the original projection of -0.2%.

What’s really going on in the market can’t be seen in the headline alone. The main trend is that residential housing is heading upwards, including a 4.7% gain in August. But non-residential and government construction on weighing heavily on the index. Non-residential activity slipped 0.1% in August, while and public spending fell 1.1%.

Compared to last year, total spending is down 11.6%. 

The data suggests “the drag on GDP growth from residential investment ended in the third quarter, although it appears that spending on nonresidential structures will be a larger drag in the third quarter than in the second,” said economists at RDQ. 

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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