- Construction spending hit a seasonally adjusted annual rate of $2.2 trillion in August, up 0.9% from a revised $2.18 trillion in July, far beating the 0.1% forecast.
- Private construction ran at $1.66 trillion, up 1.1%, with residential at $882.3 billion, also up 1.1%, while public spending edged up 0.2% to $547.8 billion.
- The broad-based gain suggests building activity is holding up despite higher borrowing costs, which matters for developers, contractors and lenders weighing new projects.
U.S. construction spending grew in August at a much faster clip than analysts expected, according to Census Bureau data reported by Dow Jones. Spending reached a seasonally adjusted annual rate of $2.2 trillion, up 0.9% from a revised $2.18 trillion in July.
Analysts surveyed by The Wall Street Journal had forecast an increase of just 0.1%.
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Private Construction Leads
Private construction ran at a seasonally adjusted annual rate of $1.66 trillion in August, 1.1% above July.
Residential construction accounted for $882.3 billion of that pace, also up 1.1% from the prior month.
Public Spending Edges Up
Public-sector spending reached $547.8 billion annualized, a 0.2% increase from the revised July estimate of $546.8 billion.
Highway construction came in at $150.6 billion, 0.1% above July, and schools drew $113.1 billion, also up 0.1%.
Costs Still Weigh on Developers
The report arrives as developers contend with high construction costs and tighter financing.
The August beat suggests building activity is holding up.
Why It Matters
For CRE, construction spending is a read on future supply and on demand for materials and labor. Strength in residential work points to continued housing delivery, while the industrial construction pipeline has also been expanding.
Lenders and developers will watch whether the August gain proves durable.
What’s Next
July’s figure was revised to $2.18 trillion, so a single month deserves caution. Watch the September release to see whether spending keeps trending higher.
