Monday, May 03, 2021

Construction Spending increased 0.2% in March

by Calculated Risk on 5/03/2021 10:18:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, 0.2 percent above the revised February estimate of $1,509.9 billion. The March figure is 5.3 percent above the March 2020 estimate of $1,436.7 billion.
emphasis added
Private spending increased and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $1,169.2 billion, 0.7 percent above the revised February estimate of $1,160.9 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $343.9 billion, 1.5 percent below the revised February estimate of $349.0 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 7% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 7% above the previous peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 6% above the previous peak in March 2009, and 31% 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 23.3%. Non-residential spending is down 9.1% year-over-year. Public spending is down 4.6% 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 will be under pressure. For example, lodging is down 24% YoY, multi-retail down 31.5% YoY, and office down 4.2% YoY.

This was well below consensus expectations of a 2.0% increase in spending, and construction spending for the previous two months was revised down.