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Economy in Brief

U.S. Construction Spending Stronger than Expected in November
by Sandy Batten  January 3, 2020

The value of construction put-in-place rose a larger-than-expected 0.6% m/m (+4.1% y/y) in November with significant upward revisions to both October and September. The Action Economics Forecast Survey had looked for a 0.3% m/m rise. As for revisions, the 0.8% m/m decline initially reported for October was revised to a 0.1% m/m gain while the 0.3% m/m decrease previously reported for September was revised up to a 0.7% m/m increase. The revisions were concentrated in private, residential construction.

Private construction rose 0.4% m/m (+1.6% y/y) in November with significant upward revisions to October and September. The initially reported 1.0% m/m decline for October was revised to a 0.1% m/m increase, and the 1.1% decrease previously reported for September was revised to a 0.3% m/m rise. Private residential construction surged 1.9% m/m (2.7% y/y) in November, led by a 3.4% m/m jump in home improvements, but also a 1.2% m/m gain in single family new house building. Multi-family construction was essentially unchanged in November after having fallen in each of the previous three months.

In contrast to residential construction, private nonresidential construction remained weak in November, declining 1.2% m/m (+0.2% y/y), its sixth monthly decline in the past eight months. Leading the weakness in November were lodging (-3.8% m/m), education (-2.0% m/m), power (-1.6% m/m) and manufacturing (-2.4% m/m).

Public construction increased 0.9% m/m (+12.4% y/y) in November with only modest upward revisions to October and September. Construction of highways and streets, the largest category accounting for nearly one-third of public sector building activity, rebounded in November, rising 2.2% m/m after having fallen 3.0% m/m in October. Education construction, the second largest category, was essentially unchanged in November from October following a 2.8% m/m gain.

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, %) Nov Oct Sep Nov Y/Y 2018 2017 2016
Total 0.6 0.1 0.7 4.1 3.3 4.5 7.1
   Private 0.4 0.1 0.3 1.6 3.2 6.0 9.3
       Residential 1.9 0.7 0.8 2.7 2.8 12.4 10.6
       Nonresidential -1.2 -0.6 -0.2 0.2 3.7 -0.7 7.9
   Public 0.9 0.1 1.8 12.4 3.6 -0.1 1.1
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