Friday, August 01, 2014

Construction Spending decreased in June

by Calculated Risk on 8/01/2014 02:19:00 PM

Earlier the Census Bureau reported that overall construction spending decreased in June:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2014 was estimated at a seasonally adjusted annual rate of $950.2 billion, 1.8 percent below the revised May estimate of $967.8 billion. The June figure is 5.5 percent above the June 2013 estimate of $900.3 billion.
Both private and public spending declined in June:
Spending on private construction was at a seasonally adjusted annual rate of $685.5 billion, 1.0 percent below the revised May estimate of $692.0 billion. Residential construction was at a seasonally adjusted annual rate of $355.9 billion in June, 0.3 percent below the revised May estimate of $357.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $329.5 billion in June, 1.6 percent below the revised May estimate of $335.0 billion. ...

In June, the estimated seasonally adjusted annual rate of public construction spending was $264.7 billion, 4.0 percent below the revised May estimate of $275.7 billion.
emphasis added
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 47% below the peak in early 2006, and up 56% from the post-bubble low.

Non-residential spending is 20% below the peak in January 2008, and up about 46% from the recent low.

Public construction spending is now 19% below the peak in March 2009 and about 1.6% above the post-recession low.

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

On a year-over-year basis, private residential construction spending is now up 7%. Non-residential spending is up 11% year-over-year. Public spending is down 3% year-over-year.

Looking forward, all categories of construction spending should increase in 2014. Residential spending is still very low, non-residential is starting to pickup, and public spending has probably hit bottom.