Spending on construction, particularly in the housing sector, plowed ahead in August.
Money flowing into construction projects ticked up to $1.4 trillion seasonally adjusted last month, a year-over-year increase of 2.5 percent, according to the Census Bureau’s monthly report on construction work done on new and existing structures across public and private sectors.
In the first eight months of 2020, $927.7 billion had been spent on construction, compared to $889.9 billion in 2019, according to the report, which has been surveying construction spending monthly since 1964. Construction spending in 2020 has outpaced the same period last year by about $37.8 billion.
In August, private homebuilders were once again responsible for the majority of construction costs.
Residential construction contributed $589.4 billion seasonally adjusted, or 42 percent, of the total monthly spend. Private nonresidential construction made up 33 percent, while public spending accounted for the remaining quarter. A majority of the public sector projects were either educational structures or highways.
August’s report echoes the prior month: In July, construction spending totaled $1,364 trillion, seasonally adjusted. Of that, homebuilders accounted for more than half of the month’s spending with about $547 billion spent on residential projects.
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US housing supply reaches nearly 40-year low
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National supply of available homes for sale hit a 40-year low last month as continued demand from homebuyers, fueled by low mortgage rates, pushed prices to all-time highs.
Homebuilders have responded to demand by ramping up production, including for new single-family homes destined to be rented out.
There were 1.2 million homes completed in August while housing starts hit 1.4 million — both figures are seasonally adjusted. The demand to build new housing drove up lumber prices over the summer.