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Economy in Brief

U.S. Construction Spending Recovers
by Tom Moeller  May 2, 2011

The value of construction spending rebounded 1.4% during March following a deepened 2.4% February decline. Consensus expectations as indicated by Actions Economics called for a 0.4% monthly gain.

The rise in construction last month was led by a 2.2% gain in private sector building. That increase reflected a 2.6% recovery in residential building after the weather-induced 6.8% February plunge. Volatility in improvements has been most extreme. It rose 6.9% (-6.3% y/y) following the 12.9% February shortfall. Single-family construction fell another 1.0% (-4.4% y/y) while multi-family building was off 2.2% (-13.2% y/y).

Nonresidential construction activity was relatively firm in March. However, a 1.8% gain still left the quarterly average down 6.9% from Q4 of last year. The March rise was led by a 3.1% gain in education (-17.8% y/y), a 2.7% rise in commercial food & beverages (-3.3% y/y) and a 2.2% increase in health care building (-7.7% y/y).

Public construction activity ticked up just 0.1%, following a revised 1.4% decrease in February. The March uptick reflected a 3.0% increase in health care (12.2% y/y), a 2.1% increase in office building (-10.9% y/y) as well as a 0.6% uptick in highways and streets (4.9% y/y). These gains were offset by declines in sewerage & waste disposal (-7.9% y/y) and water supply (-0.9% 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 (%) Mar Feb Jan Y/Y 2010 2009 2008
Total 1.4 -2.4 -1.0 -6.7 -10.4 -14.9 -7.5
Private 2.2 -2.9 -1.4 -9.2 -14.3 -21.9 -12.2
   Residential 2.6 -6.8 4.6 -8.1 -1.4 -29.9 -29.0
   Nonresidential 1.8 1.0 -6.8 -10.2 -23.4 -15.0 10.5
Public 0.1 -1.4 -0.3 -2.3 -3.1 2.2 6.6
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