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Economy in Brief

U.S. Construction Activity Remains Near 2003 Low
by Tom Moeller May 3, 2010

Construction activity remains depressed. The negligible 0.2% uptick in March after the 2.1% February collapse left it near the lowest level since 2003. The latest rise barely beat Consensus expectations for a 0.3% dip.

Total private construction activity continued lower in March, led down by a 1.1% drop in residential building activity. The decline reflected a 6.3% drop (-58.1% y/y) in multi-family building activity and a 3.0% decline (+6.8% y/y) in improvements. Conversely, single-family construction activity rose 1.6% (17.2% y/y). It has risen consecutively m/m since last June.

Nonresidential building activity fell another 0.7% during March and was off by one-quarter during the last twelve months. Spending on lodging fell by nearly two-thirds during the last year while office construction dropped 42%. Retail shopping centers also have developed a hard downward trend (-39.8% y/y) in addition to school construction (-12.6% y/y). Health care construction also has suffered (-16.3% y/y).

In the public sector, building activity bucked the negative trend and rose 2.3% in March. The gain was led by a 23.7% rise (-14.9% y/y) in power-plant construction. Spending on health-care facilities added to the gain with a 4.9% increase (0.0% y/y) while spending on highways & streets rose 1.5% (-1.4% y/y). Building in the education sector fell 2.2% for the month and was down 16.9% y/y.

The construction put-in-place figures are available in Haver's USECON database.

Construction Put In Place (%) March February January Y/Y 2009 2008 2007
Total 0.2 -2.1 -0.7 -12.3 -12.5 -6.9 -1.6
Private -0.9 -2.4 -0.1 -15.3 -18.8 -11.1 -5.7
  Residential -1.1 -3.4 3.8 1.2 -28.0 -29.1 -19.7
  Nonresidential -0.7 -1.5 -3.3 -25.5 -11.1 13.2 23.1
Public 2.3 -1.6 -1.9 -6.3 3.3 5.6 13.1
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