Wells Fargo Reports: Construction spending increases for the second month

Total construction spending rose 0.2% in September, the second consecutive monthly increase. Prior months’ data was revised downward. Residential outlay rose 0.7% and nonresidential fell 0.1%.

Residential outlays show improvement

Construction spending rose 0.2% in September to a $787.2 billion annual pace, but fell 1.3% on a year ago basis. Private residential outlays rose 0.9% with much of the increase in home improvements, which are up 1.4%. Single-family and multifamily also rose in September and reinforces the gain in builder segment. In fact, the NAHB housing market index rose 4 points in October to 18.

Private nonresidential outlays continue to grow

Private nonresidential construction spending is now up to 7.4% from  year ago levels with power and manufacturing leading the way. Manufacturing, which includes data centers, will likely continue to grow as firms invest further in data storage and management. Public spending however, fell 0.6%. As it relates to the third-quarter economic growth, assumptions made by the BEA were in line with actual data.

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