U.S. Construction Activity Falls To Lowest Since 2003

Construction activity continued to move lower in January to the lowest level since 2003. Construction outlays fell 0.6% following an unrevised 1.2% December decline but the November drop was doubled. The latest decline roughly equaled the Consensus estimate.

Although the level of total private construction activity continued lower in January, residential building activity increased for the first time in three months. All of the gain was, however, due to a 4.7% rise (10.6% y/y) in spending on home improvements. Single-family construction activity slipped 0.2% (-8.6% y/y) while multi-family building dropped a sharp 11.1% and was off one-half from the year ago level. 

Nonresidential building activity fell another 2.1% during January and was off 19.9% during the last twelve months. Since the 2008 peak, activity has fallen by one-quarter. Spending on lodging fell 9.8% during January (-46.0% y/y) while office construction dropped 1.6% (-34.25 y/y). Health care construction fell a lesser 0.5% (-10.6% y/y) and educational building also slipped just 0.7% (-15.8% y/y).

In the public sector, building activity slipped 0.7% as commercial building fell 9.6% (+9.9% y/y). Spending on highways & streets offset that decline with a 1.2% increase (5.5% y/y). Public spending on health care facilities fell a sharp 8.2% m/m but remained up modestly. Building in the education sector was unchanged for the month and down 6.2% from last January.

The construction put-in-place figures are available in Haver's USECON database.