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Monday, January 03, 2022

Construction Spending Increased 0.4% in November

by Calculated Risk on 1/03/2022 10:36:00 AM

From the Census Bureau reported that overall construction spending increased 0.2%:

Construction spending during November 2021 was estimated at a seasonally adjusted annual rate of $1,625.9 billion, 0.4 percent above the revised October estimate of $1,618.8 billion. The November figure is 9.3 percent above the November 2020 estimate of $1,487.2 billion.
emphasis added
Private spending increased and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $1,273.6 billion, 0.6 percent above the revised October estimate of $1,265.8 billion. ...

In November, the estimated seasonally adjusted annual rate of public construction spending was $352.3 billion, 0.2 percent below the revised October estimate of $353.0 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 17% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 15% above the bubble era peak in January 2008 (nominal dollars) but has been soft recently.

Public construction spending is 8% above the peak in March 2009.

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 16.3%. Non-residential spending is up 6.7% year-over-year. Public spending is down 0.8% year-over-year.

Construction was considered an essential service during the early months of the pandemic in most areas and did not decline sharply like many other sectors.  However, some sectors of non-residential have been under pressure. For example, lodging is down 30.7% YoY.

This was below consensus expectations of a 0.6% increase in spending; however, construction spending for the previous two months was revised up.