Friday, December 01, 2017

Construction Spending increased in October

by Bill McBride on 12/01/2017 11:22:00 AM

Earlier today, the Census Bureau reported that overall construction spending increased in October:

Construction spending during October 2017 was estimated at a seasonally adjusted annual rate of $1,241.5 billion, 1.4 percent above the revised September estimate of $1,224.6 billion. The October figure is 2.9 percent above the October 2016 estimate of $1,206.6 billion.
Both private and public spending increased in October:
Spending on private construction was at a seasonally adjusted annual rate of $949.9 billion, 0.6 percent above the revised September estimate of $943.8 billion ...

In October, the estimated seasonally adjusted annual rate of public construction spending was $291.6 billion, 3.9 percent above the revised September 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 increasing, but is still 24% below the bubble peak.

Non-residential spending has been declining over the last year, but is 4% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 10% below the peak in March 2009, and 11% 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 down 1% year-over-year. Public spending is up 2% year-over-year.

This was above the consensus forecast of a 0.5% increase for October, and public spending for the previous two months was revised up.