Macro Flash Report
Construction Spending
Takeaway:
August CPIP (Construction Put In Place) data came in below expectations for the 6th month in the last 7. The monthly stagnation is to be expected due to the prolonged period of elevated interest rates, however, the annual growth rate remains positive at 4.1%. With the start of the rate-cutting cycle, we anticipate a quick response in residential spending, supported by public expenditures. Nonresidential spending, however, will take longer to recover.
Total Construction Spending – Private Residential, Private Nonresidential, & Public
Construction Spending declined by -0.1% month-over-month to a seasonally adjusted annual rate of $2,132 billion in August, marking the third consecutive monthly decline. This follows a revised lower -0.5% drop in July and fell short of market expectations for a 0.1% rise.
- Private spending decreased by -0.2%, driven by a -0.3% drop in the residential sector, particularly in single-family housing (-1.5%).
- Nonresidential spending also dipped -0.1%, with notable declines in educational (-1.1%) and healthcare (-0.8%)
- Conversely, public spending rose 0.3%, bolstered by a 1.6% increase in residential projects and a modest 0.3% gain in non- residential projects.
- On an annual basis, construction spending grew by 4.1%.