Global| Nov 03 2014U.S. Construction Spending Declines M/M As Forward Momentum Eases
by:Tom Moeller
|in:Economy in Brief
Summary
The value of construction put-in-place edged 0.4% lower (+2.9% y/y) during September following a 0.5% August decline. The 0.3% July rise was revised sharply lower. Since May's peak, the value of construction spending has fallen 2.3%, [...]
The value of construction put-in-place edged 0.4% lower (+2.9% y/y) during September following a 0.5% August decline. The 0.3% July rise was revised sharply lower. Since May's peak, the value of construction spending has fallen 2.3%, pulling y/y growth to 2.9% versus its high of 9.8% in January. The latest increase disappointed expectations for a 0.6% rise in the Action Economics Forecast Survey.
Private sector construction outlays slipped 0.1% in September and y/y growth declined to 3.4% from its 2012 high of 16.0%. Nonresidential building fell 0.6% (+6.3% y/y), down for the third month in the last four. It reflected a 3.1% decline (+2.3% y/y) in power plants and a 1.1% drop (-13.6% y/y) in communication facilities. These declines were countered by a 2.2% rise (18.0% y/y) in office construction. Residential building nudged 0.4% higher (0.7% y/y), continuing the significant slowdown in momentum since early-2013. Single-family homebuilding improved 1.1% (9.8% y/y) versus its 35.0% y/y early last year. Multi-family building declined 1.0%. Year-to-year growth of 25.7% was roughly half that of late-2012. Spending on improvements slipped 0.3% and the year-to-year decline of 17.1% compared to the peak of +16.4% y/y early last year.
Forward momentum behind public sector building activity eased as September activity fell 1.3%, down for the third month in the last four. Nevertheless, the value of activity rose 1.7% y/y compared to negative growth extending back to 2009. Government office building is up 6.0% y/y compared to a one-quarter decline last year. Spending on education facilities jumped 8.4% y/y compared to a 9.8% decline last year. Countering these gains was 1.7% y/y decline in spending on highways & streets.
The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.
| Construction Put in Place (%) | Sep | Aug | Jul | Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Total | -0.4 | -0.5 | 0.3 | 2.9 | 5.7 | 9.2 | -2.1 |
| Private | -0.1 | -0.3 | -0.2 | 3.4 | 10.1 | 16.0 | -0.1 |
| Residential | 0.4 | -0.3 | -0.5 | 0.7 | 20.4 | 14.4 | 1.9 |
| Nonresidential | -0.6 | -0.3 | 0.1 | 6.3 | 0.6 | 17.5 | -1.8 |
| Public | -1.3 | -1.0 | 1.6 | 1.7 | -3.5 | -2.8 | -5.4 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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