Thursday, March 01, 2012

Construction Spending declines slightly in January

by Calculated Risk on 3/01/2012 12:05:00 PM

Catching up ... This morning the Census Bureau reported that overall construction spending declined slightly in January:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during January 2012 was estimated at a seasonally adjusted annual rate of $827.0 billion, 0.1 percent (±1.1%)* below the revised December estimate of $827.6 billion. The January figure is 7.1 percent (±1.8%) above the January 2011 estimate of $772.0 billion.
Private construction spending was unchanged in January:
Spending on private construction was at a seasonally adjusted annual rate of $538.7 billion, nearly the same as (±1.1%)* the revised December estimate of $538.7 billion. Residential construction was at a seasonally adjusted annual rate of $253.6 billion in January, 1.8 percent (±1.3%) above the revised December estimate of $249.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $285.0 billion in January, 1.5 percent (±1.1%) below the revised December estimate of $289.5 billion.
Private 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 is 62.5% below the peak in early 2006, and up 13% from the recent low. Non-residential spending is 31% below the peak in January 2008, and up about 17% from the recent low.

Public construction spending is now 11% below the peak in March 2009.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, both private residential and non-residential construction spending are positive, but public spending is down slightly on a year-over-year basis. The year-over-year improvements in private non-residential are mostly due to energy spending (power and electric).

The year-over-year improvement in private residential investment is an important change (the positive in 2010 was related to the tax credit), and it appears the bottom is in for residential investment.
All Housing Investment and Construction Graphs

Earlier:
ISM Manufacturing index indicates slower expansion in February
Personal Income increased 0.3% in January, Spending 0.2%
Weekly Initial Unemployment Claims decline slightly to 351,000