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Economy in Brief

U.S. Construction Spending Declines; Public Sector Building Trends Higher
by Tom Moeller  July 1, 2019

The value of construction put-in-place declined 0.8% (-1.5% y/y) during May following a 0.4% April gain, revised from unchanged. A 0.2% rise had been expected in the Action Economics Forecast Survey.

Construction in the private sector fell 0.7% (-5.4% y/y), down for the third straight month. Residential construction declined 0.6% (-9.6% y/y), continuing a slide that began the last year. The value of home improvements declined 1.2% (-17.3% y/y) after falling sharply in all but one month this year. Single-family building eased 0.8% (-7.5% y/y) and has been trending lower since early last year. Offsetting these declines was a 1.9% rise (9.2% y/y) in multi-family construction, the value of which hit a record high.

Private nonresidential building activity declined 0.9% (-0.1% y/y) during May after a 1.4% fall. Office construction was off 1.0% (+7.3% y/y) while multi-retail building declined 2.2% (-36.5% y/y). Health care construction eased 0.2% (+5.3% y/y) but transportation sector building rose 4.3% (19.8% y/y).

Public sector building activity declined 0.9% during September (+11.4% y/y) following a 4.5% jump. It has surged this year, up 14.5% since December. Construction of highways & streets has risen by one-quarter since December as rebuilding the nation's infrastructure gets some needed attention. It accounts for roughly one-third of the dollar value of public building activity. Transportation sector building also has been strong, up 12.3% year-to-date. Commercial construction has risen 10.6% so far this year and health care building is up 8.7% since December.

The construction spending figures, some of which date back to 1946, are in Haver's USECON database. The expectations reading can be found in the AS1REPNA database.

Construction Put in Place (SA, %) May Apr Mar May Y/Y 2018 2017 2016
Total -0.8 0.4 0.1 -1.5 3.9 4.5 7.0
  Private -0.7 -1.0 -0.1 -5.4 3.1 7.1 9.2
    Residential -0.6 -0.6 -0.8 -9.6 2.8 12.4 10.7
    Nonresidential -0.9 -1.4 0.6 -0.1 3.4 1.3 7.7
  Public -0.9 4.5 0.6 11.4 6.4 -3.2 0.7
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