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Economy in Brief

U.S. Construction Spending Declines Again
by Tom Moeller  March 1, 2011

Builders were kept off the job during January for the second consecutive month by severe winter weather. The value of construction put-in-place fell 0.7% following a revised 1.6% December decline, originally reported as down 2.5%. The latest figure equaled consensus expectations.

Nonresidential building posted a large 6.9% decline after a 1.5% December drop. Building in the lodging sector fell 18.2% (-47.4% y/y) and power construction fell 11.8% (+0.1% y/y). Healthcare building fell 6.4% (-2.0% y/y) while amusement and recreation building activity fell 6.2% (-3.2% y/y). Residential building activity increased 5.3% (-7.7% y/y) as spending on improvements surged 10.5% (-8.7% y/y). Single-family building curiously again ticked up 0.8% (-4.8% y/y), though not seasonally adjusted activity fell 7.0%, the same as in January 2010. Multi-family building activity slumped 2.9% (-20.1% y/y) after a 7.2% December drop.

Public construction activity was roughly unchanged after a lessened 1.7% December decline. Highways & streets construction slipped 0.8% but the y/y increase of 11.3% is a sign of the developing focus on infrastructure rebuilding. Highway construction amounts to one-quarter of the dollars spent on public sector building. Office building slumped 3.7% (-20.3% y/y) and power facilities building dropped 5.9% but remained up by nearly one-half from last year. Conversely, commercial construction rose 7.2% (-1.6% y/y) while water supply construction increased 3.0% (18.4% y/y)

The construction put-in-place figures are available in Haver's USECON database. The expectations figure is contained in Haver's AS1REPNA database.

Construction Put in Place (%) Jan Dec Nov Y/Y 2010 2009 2008
Total -0.7 -1.6 0.1 -5.9 -10.3 -14.9 -7.5
Private -1.2 -1.6 1.9 -10.5 -14.2 -21.9 -12.2
 Residential 5.3 -1.7 1.2 -7.7 -1.2 -29.9 -29
 Nonresidential -6.9 -1.5 2.6 -13.2 -23.3 -15.0 10.5
Public 0.1 -1.7 -2.6 2.9 -3.0 2.2 6.6
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