Tuesday, September 04, 2018

Construction Spending increased 0.1% in July

by Bill McBride on 9/04/2018 11:16:00 AM

Earlier today, the Census Bureau reported that overall construction spending increased slightly in July:

Construction spending during July 2018 was estimated at a seasonally adjusted annual rate of $1,315.4 billion, 0.1 percent above the revised June estimate of $1,314.2 billion. The July figure is 5.8 percent above the July 2017 estimate of $1,242.8 billion.
Private spending decreased and public spending increased:
Spending on private construction was at a seasonally adjusted annual rate of $1,010.9 billion, 0.1 percent below the revised June estimate of $1,011.9 billion. ...

In July, the estimated seasonally adjusted annual rate of public construction spending was $304.5 billion, 0.7 percent above the revised June estimate of $302.3 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 17% below the bubble peak.

Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars).

Public construction spending is now 6% below the peak in March 2009, and 16% 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 7%. Non-residential spending is up 3% year-over-year. Public spending is up 8% year-over-year.

This was below the consensus forecast of a 0.4% increase for July.  Also, construction spending for May and June were revised down.