Monday, February 01, 2016

Construction Spending increased 0.1% in December, Up 10.5% in 2015 vs 2014

by Bill McBride on 2/01/2016 11:55:00 AM

The Census Bureau reported that overall construction spending increased slightly in December compared to November:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2015 was estimated at a seasonally adjusted annual rate of $1,116.6 billion, 0.1 percent above the revised November estimate of $1,116.0 billion. The December figure is 8.2 percent above the December 2014 estimate of $1,031.6 billion.

The value of construction in 2015 was $1,097.3 billion, 10.5 percent above the $993.4 billion spent in 2014.
Private spending decreased and public spending increased in December:
Spending on private construction was at a seasonally adjusted annual rate of $824.0 billion, 0.6 percent below the revised November estimate of $828.8 billion. ...

In December, the estimated seasonally adjusted annual rate of public construction spending was $292.5 billion, 1.9 percent above the revised November estimate of $287.1 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 37% below the bubble peak.

Non-residential spending is only 5% 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.

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 8%. Non-residential spending is up 11% year-over-year. Public spending is up 4% 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 is also increasing after several years of austerity.

This was below the consensus forecast of a 0.6% increase for December, but overall growth for construction spending in 2015 was solid, up 10.5% from 2014.