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Economy in Brief

U.S. Construction Spending Nudges Higher
by Tom Moeller  July 1, 2014

The value of construction put-in-place edged up 0.1% (6.6% y/y) during May following a 0.8% April increase, revised from 0.2%. Figures back to January 2008 were revised. Since December, the value of construction spending has fallen 0.5%. The latest increase disappointed expectations for a 0.4% rise in the Action Economics Forecast Survey.

Private sector construction outlays slipped 0.3% in May (+9.0% y/y) and reversed a 0.3% April gain. Residential building declined 1.5% (+7.5% y/y) and forward momentum has slowed drastically since early-2013. Single-family homebuilding declined 1.4% in May after a 2.1% increase while y/y growth of 10.9% was down from 35.0% y/y early-last year. Multi-family building was off 0.5% in May after a 2.1% rise. Momentum here also was off significantly. Year-to-year growth of 30.7% was roughly half that of late-2012. Spending on improvements fell 1.9% in May, the fifth consecutive month of decline. Growth turned to a negative 2.4% y/y versus the peak of +13.1% y/y early-last year. To the up-side, nonresidential building activity gained 1.1% in May and the year-to-year rise of 10.7% followed a 0.6% uptick last year.

The story also is firm in the public sector. The value of building activity here improved 1.0% in May after strong gains during the prior two months. Annual growth of 1.2% compares to declines ranging from 2.8% to 5.4% since 2010. Spending on education rose 1.7% y/y in May after declining as much as 13.4% y/y in 2010. Spending on highways & streets rose 2.3% y/y. That's versus the 2.9% y/y decline in 2011 and little rise since. Still falling at an accelerated 36.0% y/y rate is commercial construction, the worst growth rate on record.

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

Construction Put in Place (%) May Apr Mar Y/Y 2013 2012 2011
Total 0.1 0.8 0.0 6.6 5.7 9.2 -2.1
  Private -0.3 0.3 -0.6 9.0 10.1 16.0 -0.1
    Residential -1.5 0.5 0.2 7.5 20.4 14.4 1.9
    Nonresidential 1.1 0.1 -1.4 10.7 0.6 17.5 -1.8
  Public 1.0 2.1 1.6 1.2 -3.5 -2.8 -5.4
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