WASHINGTON - Construction spending rose 0.5% in October, slightly behind the 0.6% gain expected due to a sharp drop in private nonresidential construction, data released by the Commerce Department Thursday morning showed.
September construction was revised up to a flat reading from the previously reported 0.4% decline, while August spending was revised up sharply to a 0.5% gain from the 0.5% decline previously reported.
The data suggest that third quarter fixed investment could see an upward revision with the final GDP adjustment for the quarter on December 22.
Private residential construction spending rose 1.6% in the month, as new home building was up 2.8% based on an MNI calculation. Single-family building and multi-family building were both up 2.8% in the month.
Providing some offset to the gain in new home building, residential construction excluding new homes, which captures home remodeling, fell 0.6% in October after a 1.2% increase in September.
Nonresidential private construction fell 2.1%, with declines in every category except transportation and communication. Manufacturing construction fell 2.4%, power construction declined 4.3%, and commercial construction fell 2.0%.
Public construction rose 2.8% in October, the largest monthly gain since December 2015. State and local government spending, the much larger portion of public construction, was up 2.3% after a 0.5% increase in September, while Federal government construction surged 8.1% in October after a 1.6% decline in September. Both gains were the largest since the end of 2015.
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