Key facts
- Construction spending fell 1.9% in September after an upwardly revised 2.0% rise in August, the Census Bureau said.
- Economists polled by Reuters had forecast a 0.3% increase for September.
- Construction spending dropped 2.7% year-over-year in September.
- Residential project investment slumped 5.5% in September, likely reflecting weakness in renovations.
- The average 30-year fixed mortgage rate rose at least 125 basis points since the war with Iran began in late February, Freddie Mac data showed.
- Public construction investment dipped 0.1% in September, with federal project outlays up 2.5%.
US construction spending fell 1.9% in September, nearly reversing an upwardly revised 2.0% increase in August, the Commerce Department's Census Bureau said on Monday. Economists polled by Reuters had forecast a 0.3% rise, after a previously reported 0.9% August increase.
On a year-over-year basis, construction spending dropped 2.7% in September. Spending on private construction projects decreased 2.4% after gaining 2.6% in August. Investment in residential projects slumped 5.5%, likely reflecting weakness in renovations, while single-family housing outlays were unchanged and down 2.4% year-over-year.
Residential investment eased back into contraction in the third quarter, as the US-Israeli war with Iran pushed up mortgage rates. The average rate on a 30-year fixed-rate mortgage rose by at least 125 basis points since the war started in late February, data from mortgage finance firm Freddie Mac showed.
Spending on multifamily housing units edged up 0.1%. Private nonresidential structures investment increased 1.1%, with power plant outlays advancing 1.2%. Public construction investment dipped 0.1% after gaining 0.2% in August; state and local government spending fell 0.3%, while federal government project outlays jumped 2.5%.