Global| Aug 01 2019U.S. Construction Spending Unexpectedly Weakens
by:Tom Moeller
|in:Economy in Brief
Summary
Building sector activity continues to weaken. The value of construction put-in-place fell 1.3% (-2.0% y/y) during June following a 0.5% May decline, revised from -0.8. A 0.3% rise had been expected in the Action Economics Forecast [...]
Building sector activity continues to weaken. The value of construction put-in-place fell 1.3% (-2.0% y/y) during June following a 0.5% May decline, revised from -0.8. A 0.3% rise had been expected in the Action Economics Forecast Survey.
Construction activity in the private sector fell 0.4% (-4.6% y/y), down for the fourth straight month. Residential construction declined 0.5% (-7.3% y/y), continuing a slide that began last year. The value of home improvements declined 0.5% (-10.2% y/y) and reversed the 0.7% May rise. Single-family building eased 0.7% (-8.5% y/y) and has been trending lower since early last year. Countering these declines was a 0.2% rise (10.1% y/y) in multi-family construction, the value of which was a record high.
Private nonresidential building activity declined 0.3% (-1.1% y/y) during June, down for the third consecutive month. Office construction improved 0.4% (8.9% y/y) while commercial building rose 1.3% (-11.8% y/y). Manufacturing building rose 0.9% (7.8% y/y). Health care construction improved 0.5% (4.8% y/y) but transportation sector building weakened 5.4% (+5.4% y/y). Power construction fell 2.1% (-4.9% y/y).
Public sector building activity declined 3.7% during June (+6.0% y/y) following a 1.2% slump. Construction of highways & streets fell 6.4% (+6.8% y/y). It accounts for roughly one-third of the dollar value of public building activity. Transportation sector building eased 0.3% (+8.5% y/y) while commercial construction rose 2.9% (+17.6% y/y). Health care building declined 3.4% (-11.7% y/y).
The construction spending figures, some of which date back to 1946, are in Haver's USECON database. The expectations reading can be found in the AS1REPNA database.
| Construction Put in Place (SA, %) | Jun | May | Apr | Jun Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Total | -1.3 | -0.5 | 0.9 | -2.0 | 3.9 | 4.5 | 7.0 |
| Private | -0.4 | -0.3 | -0.0 | -4.6 | 3.1 | 7.1 | 9.2 |
| Residential | -0.5 | 0.0 | 0.9 | -7.3 | 2.8 | 12.4 | 10.7 |
| Nonresidential | -0.3 | -0.6 | -1.1 | -1.1 | 3.4 | 1.3 | 7.7 |
| Public | -3.7 | -1.2 | 3.6 | 6.0 | 6.4 | -3.2 | 0.7 |
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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