Monday, May 04, 2009

Private Construction Spending Declines Slightly in March

by Calculated Risk on 5/04/2009 10:01:00 AM

Private residential construction spending is 61.8% below the peak of early 2006.

Private non-residential construction spending is 5.7% below the peak of last September.

Construction Spending Click on graph for larger image in new window.

The first graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.

Residential construction spending is still declining, and now nonresidential spending has peaked and will probably decline sharply over the next 18 months to two years.

Construction Spending YoYThe second graph shows the year-over-year change for private residential and nonresidential construction spending.

Nonresidential spending is essentially flat on a year-over-year basis, and will turn strongly negative going forward. Residential construction spending is still declining, although the YoY change will probably be less negative going forward.

As I've noted before, these will probably be two key stories for 2009: the collapse in private non-residential construction, and the probable bottom for residential construction spending. Both stories are just developing ...

From the Census Bureau: February 2009 Construction at $967.5 Billion Annual Rate

Spending on private construction was at a seasonally adjusted annual rate of $661.0 billion, 0.1 percent (±1.4%) below the revised February estimate of $661.6 billion. Residential construction was at a seasonally adjusted annual rate of $258.4 billion in March, 4.2 percent (±1.3%) below the revised February estimate of $269.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $402.6 billion in March, 2.7 percent (±1.4%) above the revised February estimate of $392.0 billion.