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Economy in Brief

U.S. Construction Spending Continues Its String of Gains in April But at a Slower Pace
by Winnie Tapasanun  June 1, 2022

• Total construction gains for the 14th consecutive month; Mar. and Feb. revised up.

• Residential private construction rises for the ninth straight month, led by home improvement building.

• Nonresidential private construction declines for the second consecutive month.

• Public sector construction falls for the second time in three months; all subcategories fall except amusement & recreation.

The value of construction put-in-place increased 0.2% m/m (12.3% y/y) in April after upwardly revised rises of 0.3% in March (+0.1% initially) and 1.0% in February (+0.5% previously), according to the U.S. Census Bureau. The April m/m reading was the 14th straight monthly rise. A 0.6% April increase had been expected in the Action Economics Forecast Survey.

Private construction grew 0.5% (15.3% y/y) in April, the ninth consecutive m/m gain, on top of a 0.2% increase in March. Residential private construction rose 0.9% (18.4% y/y) after a 0.7% rise, registering the ninth successive m/m gain. Home improvement building advanced 1.5% (23.1% y/y), the first monthly increase since January, following a 0.1% downtick. Multi-family building rebounded 0.8% (3.1% y/y), the largest m/m gain since December, after a 0.4% decline. Single-family building rose 0.5% (19.3% y/y), the smallest of six straight m/m increases, after a 1.5% rise.

Nonresidential private construction declined 0.2% (+10.1% y/y) in April following a 0.7% March drop and eight straight m/m gains. Religious construction fell 7.4% (-14.6% y/y), the fifth m/m fall in six months and the deepest since April 2020. Transportation building dropped 5.3% (-0.6% y/y) and utilities private construction fell 1.5% (-0.03% y/y); both were their second consecutive monthly declines. Heath care private construction slid 0.9% (+4.3% y/y), the third m/m slide in four months. Commercial building declined 0.2% (+19.2% y/y) following a 1.5% March drop and four straight m/m rises. To the upside, manufacturing construction recovered 1.6% (33.9% y/y), the third m/m gain in four months. Amusement & recreation private construction rebounded 1.3% (16.1% y/y), the fourth m/m rise in five months. Lodging construction rose 1.0% (-20.2% y/y), the third successive m/m gain. Educational private construction recovered 0.8% (20.5% y/y), the ninth m/m advance in 10 months. Communication private construction increased 0.2% (0.5% y/y), the third consecutive monthly gain. Office building ticked up 0.1% (5.4% y/y), the smallest of three straight m/m increases.

The value of public construction fell 0.7% (+1.8% y/y) in April after a 0.4% rebound in March, with residential public construction down 1.2% (+1.8% y/y) and nonresidential public construction down 0.7% (+1.8% y/y). Commercial public construction decreased 5.3% (-7.0% y/y) after three straight m/m rises. Health care public construction fell 4.2% (+6.7% y/y), the largest m/m fall since November 2020. Office public construction slid 3.2% (+1.8% y/y), the fourth m/m slide in five months. Water supply construction dropped 3.0% (+2.4% y/y) vs. two consecutive m/m rises. Utilities public construction fell 1.7% (+22.8% y/y) following three straight monthly increases. Public safety construction declined 1.6% (-9.7% y/y) vs. a 4.5% gain. Educational public construction fell 0.7% (-5.6% y/y), the fourth m/m fall in five months. Conservation & development public construction were down 0.3% (+27.0% y/y), the first m/m decrease since November. Sewage & waste disposal construction declined 0.3% (+8.8% y/y), the first m/m drop since December. Spending on highways & streets, which makes up 29.5% of public construction spending, dipped 0.1% (+6.3% y/y), the fourth successive m/m decline. In contrast, amusement & recreation public construction rebounded 0.9% (-4.0% y/y) following two straight m/m drops.

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.

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