Global| May 01 2015U.S. Construction Spending Growth Slackens
by:Tom Moeller
|in:Economy in Brief
Summary
Momentum in the building sector has weakened significantly. The value of construction put-in-place slipped 0.6% during March following no change in February, revised from -0.1%. Year-to-year growth of 2.0% follows gains of roughly [...]
Momentum in the building sector has weakened significantly. The value of construction put-in-place slipped 0.6% during March following no change in February, revised from -0.1%. Year-to-year growth of 2.0% follows gains of roughly 6.0% during 2013 and 2014. A 0.5% March rise had been expected in the Action Economics Forecast Survey.
The growth slowdown in private construction activity has been pronounced. Building eased 0.3% in March following a 0.3% rise. The y/y gain of 2.9% is down from 8.0% last year. Residential building activity declined 1.6% following little change in February. Negative y/y growth of 2.6% compares to a 5.1% rise last year and a 20.4% 2013 increase. Single-family building activity fell 1.8% (+7.8% y/y) after a 1.1% decline. Annual growth had been 10-30%. Multi-family building dropped 2.1% (+23.4% y/y), the first fall since July. The y/y gain of 23.4%, though still firm, is down from a one-third increase in 2014. Spending on improvements declined 1.0% and was down by one-quarter versus last year.
Nonresidential building activity improved 1.0% but y/y growth of 9.0% showed slightly less momentum than last year's 11.2% gain. Office construction jumped 2.9% (26.3% y/y) but commercial building fell 2.7% (+12.1% y/y). An area showing continued strength was amusements & recreation. Though activity fell 3.4% in March, the y/y increase of 29.5% was up from 6.3% last year and 16.2% in 2013.
Public sector building activity fell 1.5% (-0.3% y/y), the third month of decline, and it's off 7.5% since an October high. Nonresidential building fell 1.5% (-0.6% y/y) but commercial construction increased 12.4% (35.8% y/y) after a 6.6% rise. Power construction slipped 0.3% (-14.0% y/y) while highways and streets construction moved 2.4% lower (-5.6% y/y). Construction here amounts to 32% of public sector building activity.
The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.
| Construction Put in Place (%) | Mar | Feb | Jan | Mar Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Total | -0.6 | 0.0 | -1.2 | 2.0 | 6.1 | 5.7 | 9.2 |
| Private | -0.3 | 0.3 | -0.3 | 2.9 | 8.0 | 10.1 | 16.0 |
| Residential | -1.6 | 0.2 | 1.3 | -2.6 | 5.1 | 20.4 | 14.4 |
| Nonresidential | 1.0 | 0.5 | -1.8 | 9.0 | 11.2 | 0.6 | 17.5 |
| Public | -1.5 | -0.8 | -3.5 | -0.3 | 1.5 | -3.5 | -2.8 |
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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