by Calculated Risk on 9/04/2012 11:40:00 AM
Tuesday, September 04, 2012
Construction Spending decreased in July
Catching up ... This morning the Census Bureau reported that overall construction spending decreased in July:
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during July 2012 was estimated at a seasonally adjusted annual rate of $834.4 billion, 0.9 percent below the revised June estimate of $842.2 billion. The July figure is 9.3 percent above the July 2011 estimate of $763.5 billion.Both private construction spending and public spending declined:
Spending on private construction was at a seasonally adjusted annual rate of $558.7 billion, 1.2 percent below the revised June estimate of $565.6 billion. ... In July, the estimated seasonally adjusted annual rate of public construction spending was $275.7 billion, 0.4 percent below the revised June estimate of $276.7 billion.
![Private Construction Spending](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHmVPr5PeAggS6wAXQdY8PhGWytUf3h8akoTuzUL_C94kFzPxpEV5kNlzOqgUgWxhbuL6aNAE8c91hOd1nhvddCRqdSVoFOnevVVz1kMYY00joftmxSarPqrXiPldjqCkyMZ4R/s320/ConstSpendJuly2012.jpg)
This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.
Private residential spending is 61% below the peak in early 2006, and up 19% from the recent low. Non-residential spending is 29% below the peak in January 2008, and up about 30% from the recent low.
Public construction spending is now 15% below the peak in March 2009 and near the post-bubble low.
![Private Construction Spending](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJ40a1vIkCCDl32VckRm3iYYN5g-CNP4we2Qtq9NAd2k9G_6v-Il98HJHR6oxGxFmb4PQKXU42BDspvY1hytjxUd1QZCGNip3id09kyAvgMUtImB-DHw8gSYlkpcQrPwEZsxW-/s320/ConstSpendYoYJuly2012.jpg)
On a year-over-year basis, private residential construction spending is now up 19%. Non-residential spending is also up year-over-year mostly due to energy spending (power and electric). Public spending is still down year-over-year, although it now appears public construction spending is moving sideways.
The slight decline in residential construction spending in July followed several months of solid gains. The solid year-over-year increase in private residential investment is a positive for the economy (the increase in 2010 was related to the tax credit).