September Construction Spending Falls Unexpectedly




  • September construction spending dropped 0.4% in to a seasonally adjusted annual rate of $1,150 billion. This figure is 0.4% lower below the revised August estimate of $1,154.4 billion.
  • Private nonresidential construction fell 1% in September, and private residential construction spending rose 0.5%. Public construction spending dipped 0.9% in September.
  • The reported September construction spending rate is lower than expected. Economists predicated a growth of 0.4% in September.
  • Although the reported September construction spending figure was 0.2% below September 2015, spending in the first nine months of 2016 was still 4.4% higher than the same period last year.


The U.S. Census Bureau reported an unexpected 0.4% drop in September construction spending. Private nonresidential structures reported a 1% decline, which is its biggest drop in nine months. This includes structures such as factories, hospitals and roads. Overall investment in nonresidential structures contributed to the economy’s 2.9% annualized growth rate in the third quarter.

In addition to today’s construction spending reports, on Monday, the government revised the reported drops for both August and July’s construction spending. The revision took August’s decline from a first reported 0.7% drop to a revised 0.5% drop. July’s construction spending was revised to a 0.5% gain from the prior reading of a 0.3% decline.

Public construction spending declined 0.9% in September, falling to its lowest level since March 2014. Industry groups are hoping that promises from both presidential candidates will boost infrastructure spending and spur growth in the public sector in the next few years.

Although construction spending has remained stagnant since a spike in March, Dodge Data & Analytics Chief Economist, Robert Murray, is not concerned about an impending industry slowdown. He predicts spending will grow by 1% in 2016 and then jump 5% in 2017 as construction moves “into a more mature phase of expansion.”


Related- June Construction Spending

Related- April Construction Spending 

Katie Craven
Katie Craven is Marketing, Communication and Brand Manager at Watchdog Real Estate Project Managers, a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Managers as well as additional blog posts can be found here.
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