Wednesday, June 01, 2016

Construction Spending decreased 1.8% in April

by Bill McBride on 6/01/2016 12:18:00 PM

Earlier today, the Census Bureau reported that overall construction spending decreased 1.8% in April compared to March:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during April 2016 was estimated at a seasonally adjusted annual rate of $1,133.9 billion, 1.8 percent below the revised March estimate of $1,155.1 billion. The April figure is 4.5 percent above the April 2015 estimate of $1,085.0 billion.
Private and public spending decreased in April:
Spending on private construction was at a seasonally adjusted annual rate of $843.1 billion, 1.5 percent below the revised March estimate of $855.9 billion ...

In April, the estimated seasonally adjusted annual rate of public construction spending was $290.8 billion, 2.8 percent below the revised March estimate of $299.2 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 35% below the bubble peak.

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

Public construction spending is now 11% below the peak in March 2009.

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 3% year-over-year. Public spending is up 1% 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 well below the consensus forecast of a 0.6% increase for April, however construction spending for February and March were revised up.