Sunday, October 07, 2018

Catching Up: Construction Spending increased 0.1% in August

by Bill McBride on 10/07/2018 12:59:00 PM

Earlier - while I was hiking in Peru - the Census Bureau reported that overall construction spending increased slightly in August:

Construction spending during August 2018 was estimated at a seasonally adjusted annual rate of $1,318.5 billion, 0.1 percent above the revised July estimate of $1,317.4 billion. The August figure is 6.5 percent (±2.0 percent) above the August 2017 estimate of $1,237.5 billion.
Private spending decreased and public spending increased:
Spending on private construction was at a seasonally adjusted annual rate of $1,001.7 billion, 0.5 percent below the revised July estimate of $1,006.9 billion. ...

In August, the estimated seasonally adjusted annual rate of public construction spending was $316.7 billion, 2.0 percent above the revised July estimate of $310.5 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 had been increasing - although has declined slightly recently - and is still 19% below the bubble peak.

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

Public construction spending is now 3% below the peak in March 2009, and 21% 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 4%. Non-residential spending is up 5% year-over-year. Public spending is up 14% year-over-year.

This was another disappointing construction spending report, especially for residential (although public spending has picked up recently).