US construction spending tumbles in September
SPY•US construction spending fell 1.9% in September after an upwardly revised 2.0% increase in August, while economists had forecast a 0.3% rise. Spending was down 2.7% from a year earlier, with residential investment slumping 5.5%.
1. September spending declines
Construction spending fell 1.9% in September after an upwardly revised 2.0% increase in August. Economists polled by Reuters had forecast a 0.3% increase. Spending was down 2.7% year over year, and private construction fell 2.4% after gaining 2.6% in August.
2. Residential projects weaken
Investment in residential projects slumped 5.5%, likely reflecting weakness in renovations. Single-family housing outlays were unchanged for the month but down 2.4% year over year; multifamily spending edged up 0.1%. Residential investment eased back into contraction in the third quarter as the US-Israeli war with Iran pushed up mortgage rates. The average 30-year fixed mortgage rate had risen by at least 125 basis points since the war began in late February, Freddie Mac data showed.
3. Other construction spending
Private nonresidential investment rose 1.1%, including a 1.2% increase in power plant outlays. Public construction investment dipped 0.1%: state and local spending fell 0.3%, while federal project outlays jumped 2.5%.
