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Economy in Brief

U.S. Construction Spending Growth is Modest
by Tom Moeller  June 2, 2014

The value of construction put-in-place during April improved 0.2% (8.6% y/y) following a 0.6% March increase, revised from 0.2%. So far in 2014, the value of construction spending has risen 0.7%, a result held back by severe winter weather. The latest increase disappointed expectations for a 0.6% rise in the Action Economics Forecast Survey.

Private sector construction outlays slipped marginally in April (+1.7% y/y) after a 0.7% March gain. Residential building added minimally (17.2% y/y) to gains near 1.5% in the prior two months. Single-family homebuilding strengthened 1.3% (14.5% y/y) after a 0.7% March rise. Multi-family building jumped 2.7% (31.2% y/y), but spending on improvements declined 2.2% (15.8% y/y). Nonresidential construction spending slipped minimally (+5.6% y/y) and remained down 3.5% during the last four months.

The value of public sector building activity improved 0.8% (1.2% y/y) but remained down slightly so far this year. Spending on power plants fell 5.1% (+15.6% y/y) while spending on highways & streets declined 1.7% (+4.9% y/y), the third decline this year. To the upside, educational building gained 3.0% (4.9% y/y) and health care building rose 1.6% (-13.8% y/y).

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

The Slowdown in Residential Investment and Future Prospects from the Federal Reserve Bank of Cleveland is available here.

Construction Put in Place (%) Apr Mar Feb Y/Y 2013 2012 2011
Total 0.2 0.6 0.4 8.6 5.7 8.1 -1.9
  Private -0.0 0.7 0.6 11.7 9.8 14.4 0.2
    Residential 0.1 1.5 1.6 17.2 18.5 14.6 1.9
    Nonresidential -0.1 -0.2 -0.5 5.6 1.5 14.3 -1.4
  Public 0.8 0.3 -0.3 1.2 -2.8 -2.9 -5.4
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