Wednesday, August 01, 2018

Construction Spending decreased 1.1% in June

by Bill McBride on 8/01/2018 10:45:00 AM

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

Construction spending during June 2018 was estimated at a seasonally adjusted annual rate of $1,317.2 billion, 1.1 percent below the revised May estimate of $1,332.2 billion. The June figure is 6.1 percent above the June 2017 estimate of $1,241.3 billion.
Both Private and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $1,019.8 billion, 0.4 percent below the revised May estimate of $1,023.9 billion. ...

In June, the estimated seasonally adjusted annual rate of public construction spending was $297.4 billion, 3.5 percent below the revised May estimate of $308.3 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 16% 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 14% 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 9%. Non-residential spending is up 4% year-over-year. Public spending is up 5% year-over-year.

This was well below the consensus forecast of a 0.3% increase for June.  However, construction spending for April and May were revised up (most residential construction spending was revised up).