Better news awaited builders and their suppliers this week than last, as construction spending rose to its best level since May.
Construction spending in October tracked at a seasonally adjusted rate of $971 billion, up 1.1% from September’s disappointing $960.3 billion tally, according to the US Department of Commerce. Spending through 10 months this year exceeded that of the same period in 2013 by 5.8%. School and single-family housing construction fueled the gains, while spending for commercial projects was particularly muted, the data suggest.
The positive shift followed by one week the woeful view illustrated in the S&P/Case-Shiller Home Price Indices. Although home prices increased in all 20 of the largest US markets on an annual basis, the pace of the gains continued a troubling downward trend. Nnine of the markets in the 20-City Composite showed declines on a monthly basis.
David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indicies, did mention that housing and construction statistics have been mixed, citing improved monthly housing starts, existing home sales and builders’ sentiment statistics. Still, Blitzer is optimistic heading into the new year. “With the economy looking better than a year ago, the housing outlook for 2015 is stable to slightly better.”
- Brian Shappell, CBA, CICP, NACM staff writer