Friday, May 01, 2020

Construction Spending Increased in March

by Calculated Risk on 5/01/2020 10:24:00 AM

From the Census Bureau reported that overall construction spending increased in March:

Construction spending during March 2020 was estimated at a seasonally adjusted annual rate of $1,360.5 billion, 0.9 percent above the revised February estimate of $1,348.4 billion. The March figure is 4.7 percent above the March 2019 estimate of $1,299.1 billion.
emphasis added
Both private and public spending increased:
Spending on private construction was at a seasonally adjusted annual rate of $1,012.5 billion, 0.7 percent above the revised February estimate of $1,005.8 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $348.0 billion, 1.6 percent above the revised February estimate of $342.6 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.  It started increasing again, but will slow due to the pandemic.  Residential spending is 19% below the previous peak.

Non-residential spending is 11% above the previous peak in January 2008 (nominal dollars).

Public construction spending is 7% above the previous peak in March 2009, and 33% 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 8.8%. Non-residential spending is down 1.8% year-over-year. Public spending is up  7.9% year-over-year.

This was well above consensus expectations of a 3.9% decrease in spending, however construction spending for January and February were revised down.

Construction spending will decline due to COVID-19, although construction is considered an essential service in most areas.