Thursday, February 01, 2018

Construction Spending increased in December

by Bill McBride on 2/01/2018 11:19:00 AM

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

Construction spending during December 2017 was estimated at a seasonally adjusted annual rate of $1,253.3 billion, 0.7 percent above the revised November estimate of $1,245.1 billion. The December figure is 2.6 percent above the December 2016 estimate of $1,221.6 billion.
Both private and public spending increased in December:
Spending on private construction was at a seasonally adjusted annual rate of $963.2 billion, 0.8 percent above the revised November estimate of $955.9 billion ...

In December, the estimated seasonally adjusted annual rate of public construction spending was $290.0 billion, 0.3 percent above the revised November estimate of $289.1 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 22% below the bubble peak.

Non-residential spending has been declining over the last year, but is 5% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 11% below the peak in March 2009, and 10% 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 6%. Non-residential spending is down 3% year-over-year. Public spending is up 4% year-over-year.

This was above the consensus forecast of a 0.5% increase for December, however spending for the previous two months was revised down.