WASHINGTON — Construction spending was up 1.4% in October, well above expectations, fueled by a 3.9% jump in public construction, the largest in three years, data released by the Commerce Department Friday morning showed.
Private construction spending rose 0.6% in October following declines in the previous three months.
Analysts had expected construction spending to rise 0.5%, adding to a 0.3% rise in September. With the latest data, September construction was unrevised at that 0.3% increase, but August spending was revised up to a 0.5% increase from the 0.1% rise previously reported, a positive for the next revision to third quarter GDP.
Private residential construction spending was up 0.4% in the month, but total new home building fell 0.1% based on an MNI calculation. Single-family building rose 0.3%, while multi-family building posted a 1.6% decline from September. Residential construction excluding new homes, which captures remodeling was up 1.4% based on an MNI calculation. This followed a 1.1% decline in September.
Private nonresidential construction was up 0.9% in October after declines in the previous four months. There were increases in office, lodging and manufacturing construction, but declines in power and commercial.
The data suggest that fixed investment started off the fourth quarter ahead of the previous quarter's average.
The 3.9% jump in public construction reflected a 11.1% surge in Federal Government spending, also the highest since October 2014, while state and local building rose 3.3% in the month. The data suggest a stronger reading for government spending to start the fourth quarter.
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