Monday, January 04, 2021

Construction Spending Increased 0.9% in November

by Calculated Risk on 1/04/2021 10:13:00 AM

From the Census Bureau reported that overall construction spending increased:

Construction spending during November 2020 was estimated at a seasonally adjusted annual rate of $1,459.4 billion, 0.9 percent above the revised October estimate of $1,446.9 billion. The November figure is 3.8 percent above the November 2019 estimate of $1,405.5 billion.
emphasis added
Private spending increased and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $1,111.8 billion, 1.2 percent above the revised October estimate of $1,098.6 billion. ...

In November, the estimated seasonally adjusted annual rate of public construction spending was $347.6 billion, 0.2 percent below the revised October estimate of $348.3 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.

Residential spending is 3% below the previous peak.

Non-residential spending is 9% above the previous peak in January 2008 (nominal dollars), but has been weak recently.

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 16.1%. Non-residential spending is down 9.5% year-over-year. Public spending is up 3.1% year-over-year.

Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential, and public spending (depending on disaster relief), will be under pressure. For example, lodging is down 27% YoY, multi-retail down 21% YoY, and office down 7 YoY.

This was at consensus expectations of a 0.9% increase in spending, and construction spending for the previous two months was revised up slightly.