US: Construction spending revisions increase Q3 GDP tracking estimate - Nomura

Analysts at Nomura point out that the US construction spending remained unchanged in September, while the August number was revised up to a 0.8% m-o-m gain from 0.1%.

Key Quotes

“In the private sector, both residential and non-residential construction activities increased by 0.6% and 0.1% m-o-m, respectively, in September with positive backward revisions to prior months.”

“Construction expenditure by state and local governments appears to be picking up recently, but not as strongly as we previously thought.”

“GDP tracking update: Relative to the BEA's assumptions for estimating Q3 GDP, new construction activities by state and local governments came in weaker but the positive upward revisions to private construction spending along with the jump in multi-family construction in September exceeded the BEA's expectation.

On net, the relevant elements of the September construction spending report were positive to Q3 GDP and we revised up our Q3 GDP tracking estimate by 0.2pp to 3.7% from 3.5%, previously.”