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Economy in Brief

U.S. Construction Spending Posted Solid Increase in January
by Sandy Batten  March 1, 2022

• Much larger-than expected gain in January with upward revisions to both December and November.

• Led by private nonresidential construction.

• Public sector construction rebounded after December drop.

The value of construction put-in-place jumped up 1.3% m/m (8.2% y/y) in January after an upwardly revised 0.8% m/m increase in December (initially 0.2%) and an upwardly revised 1.0% m/m gain in November (previously 0.6% m/m). The Action Economics Forecast Survey has looked for a modest 0.3% m/m rise in January.

Private construction increased a solid 1.5% m/m (11.0% y/y) in January following upwardly revised increases in both December and November. The originally reported 0.7% m/m increase in December was revised up to 1.3% while the 0.8% rise previously reported for November was bumped up to a 1.3% m/m gain. Private residential construction increased 1.3% m/m (13.4% y/y) with increases in both single family construction (1.2% m/m) and home improvements (1.8% m/m) while multi-family construction edged down 0.1% m/m, their second monthly decline in the past three months.

Private nonresidential construction rose 1.8% (7.3% y/y) in January after having slipped 0.2% m/m in December. The January gain was concentrated in manufacturing construction, which rebounded 8.5% m/m following a 3.9% slump in December, power (2.7% m/m) and transportation (1.5% m/m). Declines were relatively wide spread with the largest in religious construction (-3.4% m/m), its fifth monthly decline in the past six months.

The value of public construction rose 0.6% m/m (-1.3% y/y) in January following a 1.0% m/m decline in December (revised up from a 1.6% m/m drop) and a 0.1% decrease in November. The January rebound was led by a 3.6% m/m increase in public residential construction, only the second monthly increase in the past six months. Public nonresidential construction rose a more modest 0.5% following a 1.0% m/m decline in December. The two largest components of public nonresidential construction underperformed in January. The largest, highway and street construction, slipped 0.1% m/m, the first monthly decline in seven months. The second largest, education construction, was essentially unchanged in January after having fallen in two of the previous three months. By contrast, health care construction posted a solid 5.9% m/m increase in January, more than offsetting a 3.9% m/m decline in December. Conservation and development construction, though comparatively small, jumped up 8.3% m/m in January.

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

Construction Put in Place (SA, %) Jan Dec Nov Jan Y/Y 2021 2020 2019
Total 1.3 0.8 1.0 8.2 8.3 5.6 4.3
  Private 1.5 1.3 1.3 11.0 12.3 5.8 2.3
    Residential 1.3 2.2 0.8 13.4 23.3 15.1 -2.0
    Nonresidential 1.8 -0.2 2.3 7.3 -2.1 -4.2 7.5
  Public 0.6 -1.0 -0.1 -1.3 -4.1 4.9 11.0
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