Sunday, October 31, 2004

U.S. construction spending flat

Homebuilding outlays down for first time since Feb. 2003

CBS MarketWatch

WASHINGTON (CBS.MW) - A surprising decline in homebuilding ended seven months of strong spending on U.S. construction projects.

Construction spending was essentially flat in September, the Commerce Department estimated Monday. See full government release.

This is the first month that construction outlays have not increased since an outright decline in spending in January.

The flat reading in September was below expectations of Wall Street economists surveyed by CBS MarketWatch. Economists were expecting a gain of 0.5 percent in September. See Economic Calendar

August outlays were also revised slightly higher to a 0.9 percent gain from the 0.8 percent increase previously estimated.

Technically, construction outlays decreased to a seasonally adjusted annual rate of $1.013 billion in September, from $1.014 billion in August, but the percentage decline is less than one-tenth of one percent.

Year over year, construction spending is up 8.9 percent in September.

Homebuilding fell 0.2 percent to $551.6 billion annualized in September after gaining 1.8 percent in August. Private residential spending is up 13.1 percent in the past year.

Nonresidential private spending rose 0.2 percent to $225.8 billion annualized in September after a 0.7 percent gain in August. Nonresidential private spending is up 5.7 percent in the past year.

All told, private spending decreased 0.1 percent.

Within the private sector, spending on offices fell 2.8 percent and transportation fell 1.7 percent.

Public construction outlays rose 0.3 percent to $236.4 billion in September. Public spending is up 3.0 percent in the past year.

In the public sector, spending on educational facilities rose 2.2 percent and spending on sewage and waste treatment plants rose 2.4 percent.

In separate reports, the Institute for Supply Management said its September manufacturing index was weaker than forecast. U.S. Oct. ISM 56.8% vs. 58.9% expected

Meanwhile, the Commerce Department said consumer spending rebounded in September, while income growth remained moderate.