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Economy in Brief

U.S. Construction Spending Reverses Earlier Rebound
by Tom Moeller  May 1, 2013

Reversals and revisions can change the picture of an economic series. Such was the case with the latest construction put in place numbers. Building activity fell 1.7% (+4.8% y/y) in March and reversed a 1.5% February rise. Moreover, it added to a 4.0% January decline which was double the last estimated drop. As a result, the level of construction activity was 4.1% lower than at yearend 2012. March activity had been expected to rise 0.6% from February.

Private sector building activity fell 0.6% (+9.8% y/y) in March, pulled lower by a 1.5% decline (+2.8% y/y) in nonresidential construction. Educational spending led the way down with a 3.5% drop (-3.5% y/y) accompanied by a 3.1% shortfall (+1.0% y/y) in commercial construction. A 3.7% rise (-4.1% y/y) in communication spending offset some of this weakness. Residential building also countered these declines with a 0.4% rise (18.2% y/y). New housing construction rose 1.4% (39.6% y/y) but spending on improvements fell a sharp 1.4% (-7.3% y/y), down for the fifth straight month.

The value of public sector building declined 4.1% (-5.4% y/y) and activity was down 20.6% from 2009 high. The latest drop reflected a 10.8% decline (-29.0% y/y) in office, a 6.5% shortfall (+28.6% y/y) in power and a 5.2% drop (-5.0% y/y) in highways and streets. Residential building activity offset some of this with a 13.7% rise (-0.2% y/y).

The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database. 

Construction Put in Place (%) Mar Feb Jan Y/Y 2012 2011 2010
Total -1.7 1.5 -4.0 4.8 9.3 -3.1 -11.2
  Private -0.6 1.5 -5.1 9.8 16.4 -1.1 -15.2
    Residential 0.4 2.3 -3.4 18.2 15.5 -1.0 -2.9
    Nonresidential -1.5 0.8 -6.7 2.8 17.3 -1.3 -24.0
  Public -4.1 1.5 -1.4 -5.4 -3.0 -6.4 -3.6
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