New expense slips for the construction of new homes. Remodeling takes over
Construction spending in August, financed by public and private funds, was essentially unchanged of the previous month. The Census Bureau said total construction spending was at a seasonally adjusted annual rate of $ 1.584 trillion, unchanged from July. The rate was 8.9% higher than in August 2020, but the gain was solely due to an increase in private sector financed residential spending.
On an unadjusted basis, $ 148.020 billion was spent in the month, again essentially unchanged from the previous month. So far, in 2021, spending has totaled $ 1.035 trillion, an increase of 7.0% from the $ 966.720 billion spent in the first eight months of 2020. However, non-residential spending decreased 6.7% year-to-date (YTD). Wells Fargo said, âThe construction industry as a whole has faced a multitude of pandemic-related disruptions, such as increased safety precautions, increases in building material costs created by malfunctioning global supply chain and acute skills shortages.
Privately funded construction spending in the month was at a seasonally adjusted annual rate of $ 1.242 trillion, 0.1% below the July rate. Spending on all privately funded projects is up 13.0% from the previous August. Before adjustment, August spending on private projects totaled $ 113.863 billion, a slight month-over-month gain from the July rate of $ 111.938. Year-to-date spending is up 11.4% to $ 808.646 billion.
Residential spending is the source of all of the year-over-year gains. On a seasonally adjusted annual basis, it consumed $ 786.589 billion of total spending of $ 1.242 trillion. This is a 0.4% gain, the sixth consecutive month of growth in residential spending and a 24.3% increase from August 2020. Wells Fargo points out that month-to-month residential gains the rest were due almost entirely to a 2.5% increase. in home improvement expenses. Spending on single-family construction was down 0.7% and multi-family spending by 0.8% from July. Wells Fargo economists said more time is spent in the home and that low interest rates, rising home equity and a shortage of available-for-sale homes have led to an increase in business from repair and renovation. At the same time, shortages of essential raw materials can hamper the construction of new homes.
Single-family and multi-family expenses continued to maintain a strong year-over-year advantage. They are respectively up 38.3% and 12.7% compared to last August.
On an unadjusted basis, $ 113.863 billion was spent in the private sector in August, including $ 74.476 billion on residential projects. YTD $ 506.584 billion was spent on all residential construction, an increase of 26.2% over the same period in 2020. Single-family construction is up 38.4% and multi-family spending is up 18.4%. , 4%.
Residential construction is the only privately funded category to increase on an annual basis. The non-residential sector total is down 6.8%, with each sub-category decreasing from the amount spent in the first eight months of 2020. Five sub-categories, accommodation, office, education, religion and entertainment / entertainment , have fallen to double digits.
Publicly funded construction posted a gain of 0.5% for the month, but the seasonally adjusted annual spending rate, $ 341.869 billion, is down 4.0% from last August. Residential spending, which had been strong for the past year or so, fell 1.4% in August and is down 4.3% year-on-year.
So far this year, $ 225.845 billion has been spent in the public sector, down 6.3% from the same period in 2020.