ConDig (02-Dec-24).  Construction spending in the US nudged up 0.4% to an annual rate of $2.174 trillion in October after inching up by 0.1% to a rate of $2.165 trillion in September, according to latest figures from the U.S. Census Bureau.

It comes as economists had forecasted construction spending to increase by 0.2%. The bigger than expected rise in total construction spending came as spending on private construction grew by 0.7% to an annual rate of $1.676 trillion.

In October, the estimated seasonally adjusted annual rate of public construction spending was $497.6 billion, 0.5% below the revised September estimate of $500 billion.

“Total construction spending rose sharply in October, but that was entirely due to a sharp increase in residential activity,” said ABC chief economist Anirban Basu. “Nonresidential construction spending contracted for the month, and the declines were widespread, with spending down in 11 of the 16 subsectors. The 3.9% increase in nonresidential spending over the past 12 months is the smallest since December 2021.”

Basu noted that some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton.

“The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%,” he said. 

Given that a majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, the association expects nonresidential construction spending to rebound in the coming months.