Monday, May 03, 2010

Private Construction Spending Declines in March

by Bill McBride on 5/03/2010 10:28:00 AM

Overall construction spending increased in March, with a boost from public spending, however private construction spending - both residential and non-residential - declined in March. From the Census Bureau: March 2010 Construction at $847.3 Billion Annual Rate

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2010 was estimated at a seasonally adjusted annual rate of $847.3billion, 0.2 percent (±1.3%)* above the revised February estimate of $845.5 billion. ... Spending on private construction was at a seasonally adjusted annual rate of $550.8 billion, 0.9 percent (±1.4%)* below the revised February estimate of $555.7 billion.
Construction Spending Click on graph for larger image in new window.

The first graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.

Private residential construction spending appears to have bottomed in early 2009, but has been mostly moving sideways since then. Residential spending is now 62.8% below the peak of early 2006.

Private non-residential construction spending continues to decline as major projects are completed. Non-residential spending is now 29.9% below the peak of late 2008.

Construction Spending YoYThe second graph shows the year-over-year change for private residential and nonresidential construction spending.

Nonresidential spending is off 25.5% on a year-over-year (YoY) basis.

Residential construction spending is now up slightly from a year ago.

Private residential spending will probably exceed non-residential spending later this year - mostly because of continued declines in non-residential spending. Private consturction will be a weak sector for some time.