US Census Bureau Construction Put-In-Place Spending August 2022

Total Construction Spending in August was $1.781 trillion, down –0.7% from $1.793 trillion. However, total construction spend has increased 8.5% from $1.641 trillion in August of 2021. Compared against the CPI inflation rate of 8.3% we can say the real total construction spend has increased .2% from last year, meaning the total volume of work has stayed on pace with last year. However, using a construction cost index we may not agree with this assessment as the rise in cost of construction materials has outpaced the cost of other material goods.  

Of the total construction spend ~48% is non-residential construction. Split up between public and private spending we find that private non-residential construction makes up ~29% of total construction spending while public non-residential construction makes up ~19%. Drilling down further we see that public construction sectors (Highway & Street, Sewage & Waste, Water Supply) have changed marginally, -1.4%, +1.5%, -1.1% respectively, from last month. However, sewage & waste and Water Supply spending have both risen double digits from last year, +11.5% and +23.1%. Private construction sectors (Communication, Manufacturing, and Lodging) faired similar with marginal changes from last month +0.4%, -0.5%, +1.7% however manufacturing has seen large increases in spending from last year with +21.6% increase.  

Construction spending on office, commercial, health care, power, education, and transportation sectors comes from both public and private sources. We saw large increases in commercial spending over the past year, up 19.1%. Spending in the Power sector saw a large decrease as well in the same time frame, down 12.7%. From last month we saw marginal movements –0.5, -0.1, -0.4, -0.8, -0.4, 0 respectively. Overall, we expect to see some cooling off in spending as rising interest rates shelve less profitable projects and resources are pushed to the most profitable projects.