By Manuel Gutierrez, Consulting Economist to NKBA

Industry spending is nearly 15 percent higher than the year-ago period.

• The residential portion was up 1.0 percent for the month, while non-residential was off by 1.2 percent. Residential Construction now represents its highest share ever at 64 percent.
• Year-over-year, residential construction has grown by 18.4 percent compared with 8.5 percent for non-residential.
• Residential gains have come from growth in single family homes and homeowner remodeling, each up over 1 percent for the month, while spending in multifamily housing fell.
• Multi-family units, however, are up a sharp 22 percent over last year, suggesting that construction is focused on low-end projects.
• Building for lodging (hotels/motels), which had been suffering post-pandemic, rose 0.4 percent for the month, an encouraging development.
• A sharp increase in mortgage rates this year, resulting in 30-year fixed rates above 5.25 percent, is expected to negatively impact future construction growth.

“Construction spending has reached a record $1.38 trillion, 15 percent higher than a year ago.”