Monday, February 03, 2020

Construction Spending Decreased in December

by Calculated Risk on 2/03/2020 10:27:00 AM

From the Census Bureau reported that overall construction spending decreased in December:

Construction spending during December 2019 was estimated at a seasonally adjusted annual rate of $1,327.7 billion, 0.2 percent below the revised November estimate of $1,329.9 billion. The December figure is 5.0 percent above the December 2018 estimate of $1,264.8 billion.

The value of construction in 2019 was $1,303.5 billion, 0.3 percent below the $1,307.2 billion spent in 2018.
emphasis added
Both private and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $991.2 billion, 0.1 percent below the revised November estimate of $992.2 billion. ...

In December, the estimated seasonally adjusted annual rate of public construction spending was $336.4 billion, 0.4 percent below the revised November estimate of $337.7 billion.
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 - but turned down in the 2nd half of 2018.  Now it is increasing again, but is still 20% below the bubble peak.

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

Public construction spending is 3% above the previous peak in March 2009, and 28% 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 5.5%. Non-residential spending is down slightly year-over-year. Public spending is up 11.5% year-over-year.

This was below consensus expectations of a 0.5% increase in spending, however construction spending for October and November was revised up slightly.