Friday, September 01, 2017

Construction Spending decreased in July

by Bill McBride on 9/01/2017 11:08:00 AM

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

Construction spending during July 2017 was estimated at a seasonally adjusted annual rate of $1,211.5 billion, 0.6 percent below the revised June estimate of $1,219.2 billion. The July figure is 1.8 percent above the July 2016 estimate of $1,189.8 billion.
Private and public spending both decreased in July:
Spending on private construction was at a seasonally adjusted annual rate of $945.5 billion, 0.4 percent below the revised June estimate of $949.4 billion. ...

In July, the estimated seasonally adjusted annual rate of public construction spending was $266.0 billion, 1.4 percent below the revised June estimate of $269.8 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 increasing, but 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 18% 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 12%. Non-residential spending is down 4% year-over-year. Public spending is down 6% year-over-year.

This was  well below the consensus forecast of a 0.6% increase for July, however spending for previous months were revised up. Still a disappointing report.