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Economy in Brief

U.S. Construction Increase Light 
by Tom Moeller  March 2, 2006

Warm temperatures in January did little for the value of construction put in place which increased just 0.2%. Consensus expectations had been for a 1.1% gain but the firm 1.0% advance in December was unrevised.

Residential building rose only 0.1 following a downwardly revised 0.9% December increase. New single family building inched up just 0.1% (13.2% y/y) while the value of improvements rose 0.2% (-10.6% y/y). The value of new multi-family residential construction fell 0.5% (+12.4% y/y).

Nonresidential building added 0.5% to a downwardly revised 1.1% December increase. Office construction slipped 0.2% (+8.9% y/y) and commercial building rose 0.4% (+9.5% y/y). These y/y gains pale when compared to multi-retail commercial which rose 7.9% in January (40.0% y/y).

Public construction spending rose 0.2% following an upwardly revised 1.3% December increase. Construction activity on highways & streets, nearly one third of the value of public construction spending, recovered the prior month's decline and rose 0.9% (12.7% y/y).

These more detailed categories represent the Census Bureau’s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

Construction Put-in-place Jan Dec Y/Y 2005 2004 2003
Total 0.2% 1.0% 7.4% 9.1% 10.9% 5.4%
Private 0.2% 0.9% 6.3% 9.6% 13.6% 6.3%
  Residential 0.1% 0.9% 6.5% 11.4% 18.2% 12.9%
  Nonresidential 0.5% 1.1% 5.6% 5.2% 3.9% -5.4%
Public 0.2% 1.3% 11.3% 7.6% 2.5% 2.7%
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