- by New Deal democrat
The good news is, with the end of the government shutdown, economic data reporting resumed this morning. The bad news is, we are now in the latter part of November, and the construction spending report issued this morning was for all the way back in August. In fact, the last time I updated this information here was back at the beginning of September. So, since the information in this morning’s report is already stale, I am going to keep this brief.
When we last got information, for July, it continued the trend of declining since the summer of 2024 once we adjusted for the cost of construction materials.
In nominal terms, together with revisions, in August that reversed. For the month, total construction spending (blue in the graph below) rose 0.2%, while residential construction spending (red, right scale) increased 0.8%, the third advance in a row for both metrics in nominal terms:
Adjusted by the cost of construction materials, however, residential construction spending declilned slightly, by less than -0.1%:
Although this is higher than readings this past spring, it looks more like stabilization than an actual turnaround - and once again, we are talking about August data, so it gives us almost no currently significant insight.
Finally, the boom in spending on building manufacturing plans continued to wane, after an explosive boom following the Biden infrastructure bill:
The August decline of -0.9% is the 10th decline in the past 12 months. While the buildout of new plants continues at a very strong pace, the trend (which is more important for the direction of the economy) is a decline.
Although the nominal headline increases are nice, I take this as no better than a neutral report
