Tuesday, August 01, 2017

Construction Spending decreased in June

by Bill McBride on 8/01/2017 11:57:00 AM

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

Construction spending during June 2017 was estimated at a seasonally adjusted annual rate of $1,205.8 billion, 1.3 percent below the revised May estimate of $1,221.6 billion. The June figure is 1.6 percent above the June 2016 estimate of $1,186.4 billion.
Private and public spending both decreased in June:
Spending on private construction was at a seasonally adjusted annual rate of $940.7 billion, 0.1 percent below the revised May estimate of $941.3 billion. ...

In June, the estimated seasonally adjusted annual rate of public construction spending was $265.1 billion, 5.4 percent below the revised May estimate of $280.3 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 increasing, but is still 26% below the bubble peak.

Non-residential spending is now 6% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 19% below the peak in March 2009, and only slightly 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 9%. Non-residential spending is up 1% year-over-year. Public spending is down 9% year-over-year.

This was  well below the consensus forecast of a 0.5% increase for June, and spending for previous months were revised down. A weak report.