Global| Jul 01 2014U.S. Construction Spending Nudges Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The value of construction put-in-place edged up 0.1% (6.6% y/y) during May following a 0.8% April increase, revised from 0.2%. Figures back to January 2008 were revised. Since December, the value of construction spending has fallen [...]
The value of construction put-in-place edged up 0.1% (6.6% y/y) during May following a 0.8% April increase, revised from 0.2%. Figures back to January 2008 were revised. Since December, the value of construction spending has fallen 0.5%. The latest increase disappointed expectations for a 0.4% rise in the Action Economics Forecast Survey.
Private sector construction outlays slipped 0.3% in May (+9.0% y/y) and reversed a 0.3% April gain. Residential building declined 1.5% (+7.5% y/y) and forward momentum has slowed drastically since early-2013. Single-family homebuilding declined 1.4% in May after a 2.1% increase while y/y growth of 10.9% was down from 35.0% y/y early-last year. Multi-family building was off 0.5% in May after a 2.1% rise. Momentum here also was off significantly. Year-to-year growth of 30.7% was roughly half that of late-2012. Spending on improvements fell 1.9% in May, the fifth consecutive month of decline. Growth turned to a negative 2.4% y/y versus the peak of +13.1% y/y early-last year. To the up-side, nonresidential building activity gained 1.1% in May and the year-to-year rise of 10.7% followed a 0.6% uptick last year.
The story also is firm in the public sector. The value of building activity here improved 1.0% in May after strong gains during the prior two months. Annual growth of 1.2% compares to declines ranging from 2.8% to 5.4% since 2010. Spending on education rose 1.7% y/y in May after declining as much as 13.4% y/y in 2010. Spending on highways & streets rose 2.3% y/y. That's versus the 2.9% y/y decline in 2011 and little rise since. Still falling at an accelerated 36.0% y/y rate is commercial construction, the worst growth rate on record.
The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.
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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