Spending on U.S. construction during August was estimated at a seasonally adjusted annual rate of $1.287 trillion, rising 0.1% from the revised July estimate of $1.286 trillion, the U.S. Census Bureau said. August’s spending was 1.9% below a year earlier.
Spending on private construction was at a seasonally adjusted annual rate of $955 billion, nearly the same as the revised July estimate of $954.8 billion, and 4% below a year ago.
Of that, residential construction spending was at a seasonally adjusted annual rate of $507.2 billion in August, which is 0.9% above the revised July estimate of $502.5 billion but 5% down from a year ago.
A measure of homebuilder confidence in September revealed that although low-interest rates were fueling solid demand, concerns regarding economic uncertainty and affordability were dampening builder sentiment.
Nonetheless, according to the National Association of Home Builders and Wells Fargo, the Housing Market Index, which measures current sales conditions, inched forward to 73 points from 71 points, while buyer traffic rose to 50 from 48.
That being said, homebuilder expectations for the next six months fell from 71 to 70.
“Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” NAHB Chief Economist Robert Dietz said. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China. NAHB’s Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.”