Home Improvements Push Residential Construction Spending Up
NAHB analysis of Census Construction Spending data shows that total private residential construction spending for July registered a seasonally adjusted rate of $445.5 billion, slightly up from the June downwardly revised estimate.
The monthly gains are largely attributed to the strong growth of private construction spending on home improvements that rose to a seasonally adjusted annual rate of $147.5 billion in July, up by 1.5 percent since last month. Meanwhile, spending on single-family and multifamily both declined in July. Single-family spending edged down to $238.1 billion in July, down 0.2 percent over the revised June estimate. After hitting the record-breaking highs earlier this year, multifamily spending decreased to $59.8 billion, down by 0.6 percent since June. On an annual basis, however, multifamily spending increased by 19.8 percent. Single-family spending was also 1.7 percent higher since July 2015.
The NAHB construction spending index illustrates the strong growth in new multifamily construction since 2010, while new single-family construction and home improvements spending have drifted upward at a more modest pace. NAHB anticipates growth for new single-family spending over the rest of 2016, consistent with the modest rise in single-family starts.
The pace of private nonresidential construction spending rose 1.7 percent on a monthly basis, and was 7.1 percent higher than the July 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (30.3 percent increase), followed by lodging (28.0 percent increase) and commercial (13.5 percent increase).
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