Thursday, June 01, 2017

Construction Spending decreased in April

by Bill McBride on 6/01/2017 11:59:00 AM

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

Construction spending during April 2017 was estimated at a seasonally adjusted annual rate of $1,218.5 billion, 1.4 percent below the revised March estimate of $1,235.5 billion.
Both private and public spending decreased in April:
Spending on private construction was at a seasonally adjusted annual rate of $943.3 billion, 0.7 percent below the revised March estimate of $949.7 billion. ...

In April, the estimated seasonally adjusted annual rate of public construction spending was $275.3 billion, 3.7 percent below the revised March estimate of $285.9 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 24% below the bubble peak.

Non-residential spending is now 3% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 15% below the peak in March 2009, and only 4% 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 16%. Non-residential spending is up 4% year-over-year. Public spending is down 4% 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 April, however spending for March was revised up sharply.