Wednesday, February 01, 2017

Construction Spending decreased in December

by Bill McBride on 2/01/2017 11:34:00 AM

Earlier today, the Census Bureau reported that overall construction spending decreased in December:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2016 was estimated at a seasonally adjusted annual rate of $1,181.5 billion, 0.2 percent below the revised November estimate of $1,184.4 billion. The December figure is 4.2 percent above the December 2015 estimate of $1,133.7 billion.

The value of construction in 2016 was $1,162.4 billion, 4.5 percent above the $1,112.4 billion spent in 2015.
Private spending increased, however public spending decreased in December:
Spending on private construction was at a seasonally adjusted annual rate of $897.0 billion, 0.2 percent above the revised November estimate of $894.8 billion. ...

In December, the estimated seasonally adjusted annual rate of public construction spending was $284.5 billion, 1.7 percent below the revised November estimate of $289.6 billion.
emphasis added
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 generally increasing, and is still 31% below the bubble peak.

Non-residential spending is now 4% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 13% below the peak in March 2009, and 8% above the austerity low in February 2014.

Year-over-year 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 4%. Non-residential spending is up 9% year-over-year. Public spending is down 2% year-over-year.

Looking forward, all categories of construction spending should increase in 2017.

This was below the consensus forecast of a 0.2% increase for December, however the previous months were revised up.