Monday, May 01, 2017

Construction Spending decreased in March

by Bill McBride on 5/01/2017 11:59:00 AM

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

Construction spending during March 2017 was estimated at a seasonally adjusted annual rate of $1,218.3 billion, 0.2 percent below the revised February estimate of $1,220.7 billion. The March figure is 3.6 percent above the March 2016 estimate of $1,176.4 billion.
Private spending was unchanged, and public spending decreased in March:
Spending on private construction was at a seasonally adjusted annual rate of $940.2 billion, nearly the same as the revised February estimate of $940.1 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $278.1 billion, 0.9 percent below the revised February estimate of $280.7 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 26% below the bubble peak.

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

Public construction spending is now 15% below the peak in March 2009, and only 6% 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 7%. Non-residential spending is up 6% year-over-year. Public spending is down 6% year-over-year.

Looking forward, all categories of construction spending should increase in 2017 (maybe not public spending).

This was below the consensus forecast of a 0.5% increase for March, however January and February were revised up sharply - a decent report.