Wednesday, March 01, 2017

Construction Spending decreased in January

by Bill McBride on 3/01/2017 12:20:00 PM

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

Construction spending during January 2017 was estimated at a seasonally adjusted annual rate of $1,180.3 billion, 1.0 percent below the revised December estimate of $1,192.2 billion. The January figure is 3.1 percent above the January 2016 estimate of $1,144.9 billion.
Private spending increased, however public spending decreased in January:
Spending on private construction was at a seasonally adjusted annual rate of $911.6 billion, 0.2 percent above the revised December estimate of $909.4 billion ...

In January, the estimated seasonally adjusted annual rate of public construction spending was $268.7 billion, 5.0 percent below the revised December estimate of $282.8 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 30% below the bubble peak.

Non-residential spending is now 5% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 17% below the peak in March 2009, and only 2% 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 6%. Non-residential spending is up 9% year-over-year. Public spending is down 9% 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 January, however the previous months were revised up.