Tuesday, December 01, 2015

Construction Spending increased 1.0% in October, Up 13% YoY

by Bill McBride on 12/01/2015 01:31:00 PM

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

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during October 2015 was estimated at a seasonally adjusted annual rate of $1,107.4 billion, 1.0 percent above the revised September estimate of $1,096.6 billion. The October figure is 13.0 percent above the October 2014 estimate of $979.6 billion.

During the first 10 months of this year, construction spending amounted to $888.1 billion, 10.7 percent above the $802.3 billion for the same period in 2014.
Both private spending and public spending increased:
Spending on private construction was at a seasonally adjusted annual rate of $802.4 billion, 0.8 percent above the revised September estimate of $795.8 billion. ...

In October, the estimated seasonally adjusted annual rate of public construction spending was $304.9 billion, 1.4 percent above the revised September estimate of $300.8 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 has been increasing, but is 41% below the bubble peak.

Non-residential spending is only 3% below the peak in January 2008 (nominal dollars).

Public construction spending is now 6% below the peak in March 2009 and about 15% 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 up 17%. Non-residential spending is up 15% year-over-year. Public spending is up 6% year-over-year.

Looking forward, all categories of construction spending should increase this year and in 2016. Residential spending is still very low, non-residential is increasing (except oil and gas), and public spending has also increasing after several years of austerity.

This was above the consensus forecast of a 0.6% increase, also spending for August and September were revised up.  Another solid construction report.