Construction spending in August was estimated at a seasonally adjusted annual rate of $1,200.7 billion, 0.3% above the revised July estimate of $1,196.8 billion. The August figure is 4.4% above the August 2005 estimate of $1,150.3 billion. During the first eight months of this year, construction spending amounted to $793.2 billion, 7.2% above the $739.9 billion for the same period in 2005.
The increase was boosted by strong gains in office (2.6% from July/22.4% from Aug. 2005), lodging (2.9%/64.4%), power (3.5%/29.8%) and manufacturing (7.9%/28.2%) construction.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $929.1 billion, 0.1% percent above the revised July estimate of $927.9 billion. Residential construction was at a seasonally adjusted annual rate of $617.0 billion in August, 1.5% below the revised July estimate of $626.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $312.0 billion in August, 3.4% above the revised July estimate of $301.7 billion.
Public Construction
In August, the estimated seasonally adjusted annual rate of public construction spending was $271.6 billion, 1.1% above the revised July estimate of $268.8 billion. Educational construction was at a seasonally adjusted annual rate of $70.7 billion, 0.7% above the revised July estimate of $70.2 billion. Highway construction was at a seasonally adjusted annual rate of $77.9 billion, 0.4% above the revised July estimate of $77.6 billion.
Report Shows Housing Market Stablizing
The National Association of Realtors reported today that pending home sales are up, indicating a stabilization is taking place in the housing market.
The Pending Home Sales Index, based on contract signed in August, rose 4.3% to a level of 110.1 from a reading of 105.6 in July but is 14.1% lower than August 2005.
David Lereah, NAR’s chief economist, said the rise in the index is a hopeful sign. ‘Our sense is that home sales may have reached a low in August the Pending Home Sales Index shows home sales should be fairly stable over the next two months, although a minor decline is possible,’ he said. ‘With fewer new listings coming on the market, we should be able to draw down the inventory supply early next year to the point where home prices will rise, but at a slower pace than historic norms.’
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.
Regionally, the index in the West rose 9.2% in August to 112.7 but was 16.9% below August 2005. The index in the South increased 4.0% to 126.8 in August but was 9.4% below a year ago. In the Northeast, the index rose 3.6% in August to 95.4 but was 12.4% below August 2005. The index in the Midwest was unchanged at 93.8 in August and was 20.4% lower than a year ago.
For more details on construction spending in August, click here.
For more economic indicators, updated monthly, go to MDM’s Databank.
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