by Bill McBride on 1/04/2016 11:54:00 AM
Monday, January 04, 2016
The Census Bureau reported that overall construction spending decreased in November compared to October:
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2015 was estimated at a seasonally adjusted annual rate of $1,122.5 billion, 0.4 percent below the revised October estimate of $1,127.0 billion. The November figure is 10.5 percent above the November 2014 estimate of $1,016.1 billion.Both private spending and public spending decreased:
During the first 11 months of this year, construction spending amounted to $1,011.9 billion, 10.7 percent (±1.2%) above the $913.9 billion for the same period in 2014.
Spending on private construction was at a seasonally adjusted annual rate of $828.2 billion, 0.2 percent below the revised October estimate of $829.7 billion. ...Note: There were substantial upward revisions to private residential construction spending for the last few years.
n November, the estimated seasonally adjusted annual rate of public construction spending was $294.3 billion, 1.0 percent below the revised October estimate of $297.3 billion.
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 37% below the bubble peak.
Non-residential spending is only 3% below the peak in January 2008 (nominal dollars).
Public construction spending is now 10% below the peak in March 2009 and about 11% above the post-recession low.
The second graph shows the year-over-year change in construction spending.
On a year-over-year basis, private residential construction spending is up 11%. Non-residential spending is up 14% year-over-year. Public spending is up 6% year-over-year.
Looking forward, all categories of construction spending should increase 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 well below the consensus forecast of a 0.7% increase, however spending for prior months was revised up sharply.
Posted by Bill McBride on 1/04/2016 11:54:00 AM