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What is Construction Spending?

Construction Spending Definition. Construction Spending on a monthly basis is summarized in a report released by the U.S. Department of Commerce’s Census Bureau. The report details residential, nonresidential, and public expenditures on new construction. Figures are expressed in both nominal and inflation-adjusted (real) dollars. Economists use the real dollar figures to forecast upcoming quarterly GDP numbers since construction spending is a major component of investment spending included in GDP computations. Its usefulness as a leading indicator that can influence market behavior is questionable because monthly figures tend to fluctuate a great deal, necessitating major revisions from time to time. However, trends that extend over three months or more are sometimes deemed significant.


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