Spending on construction projects fell across the United States for a second straight month in September, spurring a decline in analysts' expectations for economic growth in Q3.
The Commerce Department [1] reported Monday that construction spending throughout September [2] came in at an estimated seasonally adjusted annual rate of $950.9 billion, down 0.4 percent from August but up 2.9 percent from a year ago.
Year-to-date through September, the government estimates total construction outlays came to $710.1 billion, an increase of 6.1 percent over the same period last year.
In a note to clients, Patrick Newport and Stephanie Karol, U.S. economists at IHS [3], called September's release "another disappointing report—and after adjusting for inflation, this report looks even more dismal."
"We expect that third-quarter real GDP will be revised down to 3.4 percent [from an original estimate of 3.5 percent [4]] based on this report," they continued.
Among the good news in Monday's report was a 0.4 percent bump in spending on residential projects, which totaled an adjusted annual rate of $354.8 billion.
A small portion of that increase came from private homebuilding outlays. According to the Commerce Department, private residential construction building was at a rate of $349.1 billion in September, up 0.4 percent month-over-month. Spending on single-family housing climbed 1.1 percent to $192.5 billion, while spending for multifamily projects fell 1 percent to $43.3 billion.
Across all categories, spending on private, nonresidential projects was down 0.6 percent for the month to a rate of just less than $331 billion.
In the public sector, the government estimates spending on home construction was up 4.7 percent from August at a rate of $5.8 billion.