by Calculated Risk on 9/28/2007 10:15:00 AM

From the Census Bureau: August 2007 Construction Spending at $1,166.7 Billion Annual Rate

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during August 2007 was estimated at a seasonally adjusted annual rate of $1,166.7 billion, 0.2 percent above the revised July estimate of $1,164.4 billion. The August figure is 1.7 percent below the August 2006 estimate of $1,186.3 billion.

During the first 8 months of this year, construction spending amounted to $768.0 billion, 3.3 percent below the $794.0 billion for the same period in 2006.
...
[Private] Residential construction was at a seasonally adjusted annual rate of $522.1 billion in August, 1.5 percent below the revised July estimate of $529.8 billion.

[Private] Nonresidential construction was at a seasonally adjusted annual rate of $353.4 billion in August, 2.3 percent above the revised July estimate of $345.5 billion.

Click on graph for larger image.

This graph shows private construction spending for residential and non-residential (SAAR in Billions). While private residential spending has declined significantly, spending for private non-residential construction has been strong.

The second graph shows the YoY change for both categories of private construction spending.

The normal historical pattern is for non-residential construction spending to follow residential construction spending. However, because of the large slump in non-residential construction following the stock market "bust", it is possible there is more pent up demand than usual - and that the non-residential boom will continue for a longer period than normal.

Right now the recent trend is holding: residential construction is declining, but private non-residential construction is still strong.