US construction spending fell 1.9% in September

Investing.com -- US construction spending declined 1.9% in September, reversing most of the previous month's gains, according to data released Monday by the Commerce Department's Census Bureau.

The drop came after August's spending rose by a revised 2.0%, up from the initially reported 0.9% increase. Economists surveyed by Reuters had expected construction spending to rise 0.3% for September.

On a year-over-year basis, construction spending fell 2.7% in September. High materials costs appeared to weigh on residential renovation projects during the month.

Private construction spending decreased 2.4% in September following a 2.6% gain in August. Investment in residential projects dropped 5.5% in September. Spending on single-family housing projects remained flat for the month but declined 2.4% compared to the prior year.

Residential investment returned to contraction in the third quarter as the US-Israeli war with Iran pushed mortgage rates higher. The average rate on a 30-year fixed-rate mortgage increased by at least 125 basis points since the conflict began in late February, according to data from mortgage finance firm Freddie Mac.

Spending on multifamily housing units rose 0.1% in September. This segment represents a small portion of the overall housing market.

Investment in private nonresidential structures grew 1.1% in September. Spending on power plants increased 1.2% during the period.

Public construction investment edged down 0.1% after a 0.2% gain in August. State and local government construction spending fell 0.3%, while federal government project outlays jumped 2.5%.

Original Article

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