Dive Brief:
- Construction spending grew 0.6% between August and September — after the August rate was revised down to $1.088 trillion — to a seasonally adjusted annual rate of $1.094 trillion, the Commerce Department reported Monday. The September rate reached its highest level since March 2008.
- September's spending total is 14.1% higher than September 2014. The Commerce Department also noted that during the first nine months of 2015, construction spending was 10.5% higher than during the first nine months of 2014.
- Private residential construction surged 1.9%, as multifamily led the gains with a 4.9% rise from August. Single-family also rose 1.3%. Public construction saw a smaller gain in September, with a 0.7% increase, and nonresidential construction slipped 0.7%.
Dive Insight:
Construction spending has been steadily rising, with September's increase marking the 10th-straight monthly rise in spending. Last month, the Commerce Department reported construction spending rose 0.7% between July and August.
Monday's results surpassed expectations, as economists polled by Reuters predicted construction spending would rise 0.5% in September.
The significant rise in multifamily spending coincides with the recently released Dodge 2016 Construction Outlook, which predicted that starts for the sector will grow 13% this year and 5% in 2016, before multifamily reaches its peak.
The dip in nonresidential building also affirms Dodge Data & Analytics' report earlier this month that found the value of overall September construction starts fell 5% between August and September, with nonresidential construction dropping 4%.
