Construction spending reports are volatile and heavily revised, but given the weakness in most housing reports, the Monthly Construction Report for August rings true.
Total Construction
Construction spending during August 2018 was estimated at a seasonally adjusted annual rate of $1,318.5 billion, 0.1 percent above the revised July estimate of $1,317.4 billion.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $1,001.7 billion, 0.5 percent below the revised July estimate of $1,006.9 billion. Residential construction was at a seasonally adjusted annual rate of $548.9 billion in August, 0.7 percent below the revised July estimate of $553.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $452.9 billion in August, 0.2 percent below the revised July estimate of $453.9 billion.
Public Construction
Public construction spending was $316.7 billion, 2.0 percent above the revised July estimate of $310.5 billion. Educational construction was at a seasonally adjusted annual rate of $72.3 billion, 1.0 percent above the revised July estimate of $71.7 billion. Highway construction was at a seasonally adjusted annual rate of $99.0 billion, 1.7 percent above the revised July estimate of $97.3 billion.
Select Seasonally-Adjusted Spending Numbers
- Total -0.1%
- Private: -0.5%
- Private Residential -0.7%
- Private Multi-Family -1.7%
- Private Non-Residential -0.2%
- Public: +2.0%
- Public Highway: +1.7%
- Public Education: +1.0%
Year-Over-Year Private Residential Construction
Year-Over-Year Private Construction
Commercial projects are larger and take longer. Once started they complete.
Businesses spending is planned years ahead so the cycles are different.
The chart suggests commercial lags residential heading into and out of recessions.
A hurricane reconstruction impact may temporarily boost the numbers for a while but the overall trends look poor.
Mike “Mish” Shedlock
I don’t see anything trending lower. Except gold.
These are tough times indeed: do you run with the herd and buy what’s over-priced or do you take the contrarian position and buy what’s cheap and un-loved? 99 out of a 100 people would pick the first option and this is why the number of consistently successful investors can be counted on the fingers of two hands.
True. There is a reason small investors do poorly. Following the crowd is a bad way to invest or trade unless you are in the middle of a strong trend.
I would be buying gold/silver after the downtrend (and plan to sell around $1300-$1500 depending on technicals. Bearish sentiment is extreme with metals so sellers are about tapped. Perhaps gold has another $100 before it turns up but the probability is it is starting a small rebound. Silver has already turned I believe.
Public: +2.0%, Public Highway: +1.7%,Public Education: +1.0%, more public debt.