Tuesday, July 01, 2014

Construction Spending increased slightly in May

by Bill McBride on 7/01/2014 11:43:00 AM

The Census Bureau reported that overall construction spending increased in May:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during May 2014 was estimated at a seasonally adjusted annual rate of $956.1 billion, 0.1 percent above the revised April estimate of $955.1 billion. The May figure is 6.6 percent above the May 2013 estimate of $896.6 billion.
Private spending declined and public spending increased in May:
Spending on private construction was at a seasonally adjusted annual rate of $682.8 billion, 0.3 percent below the revised April estimate of $684.6 billion. Residential construction was at a seasonally adjusted annual rate of $354.8 billion in May, 1.5 percent below the revised April estimate of $360.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $328.0 billion in May, 1.1 percent above the revised April estimate of $324.5 billion. ...

In May, the estimated seasonally adjusted annual rate of public construction spending was $273.3 billion, 1.0 percent above the revised April estimate of $270.5 billion.
emphasis added
Private Construction Spending Click on graph for larger image.

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

Private residential spending is 48% below the peak in early 2006, and up 55% from the post-bubble low.

Non-residential spending is 21% below the peak in January 2008, and up about 45% from the recent low.

Public construction spending is now 16% below the peak in March 2009 and about 5% above the post-recession low.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 7%. Non-residential spending is up 11% year-over-year. Public spending is up 1% year-over-year.


Looking forward, all categories of construction spending should increase in 2014. Residential spending is still very low, non-residential is starting to pickup, and public spending has probably hit bottom.

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