U.S. Construction Spending Off to a Good Fourth Quarter Start

The U.S Department of Commerce released the construction spending index for the month of October. Total construction spending rose 0.8 percent in October, the third consecutive monthly increase.

The U.S. construction spending is off to a good fourth quarter start, said Mark Vitner, an economist at Wells Fargo Securities.

Construction spending rose to a $792.1 billion annual pace, but fell 0.4 percent on a year-ago basis. Private residential outlays rose 3.4 percent, with much of the increase in home improvements, which rose 6.7 percent.

Single-family outlays continued its impressive string of gains, increasing 0.6 percent, the fifth straight increase. Multi-family construction outlays, however, fell 0.8 percent, the second monthly decline.

Private non-residential construction spending is now up 8.4 percent from year-ago levels, with power, commercial and office leading the way. Power is up 18.2 percent year over year.

Public spending fell 1.8 percent, with declines in both residential and non-residential. Public non-residential spending dropped 1.8 percent, with much of the decline due to state and local educational and highway and street outlays.