Tuesday, May 01, 2018

Construction Spending decreased 1.7% in March

by Bill McBride on 5/01/2018 10:50:00 AM

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

Construction spending during March 2018 was estimated at a seasonally adjusted annual rate of $1,284.7 billion, 1.7 percent below the revised February estimate of $1,306.4 billion. The March figure is 3.6 percent above the March 2017 estimate of $1,239.6 billion.
Private spending decreased and public spending was essentially unchanged in March:
Spending on private construction was at a seasonally adjusted annual rate of $987.5 billion, 2.1 percent below the revised February estimate of $1,009.1 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $297.2 billion, nearly the same as the revised February estimate of $297.3 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 21% below the bubble peak.

Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 9% below the peak in March 2009, and 13% 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 5%. Non-residential spending is up 2% year-over-year. Public spending is up 3% year-over-year.

This was below the consensus forecast of a 0.5% increase for March, however spending for the previous two months was revised up.