Haver Analytics
Haver Analytics
| Mar 01 2023

U.S. Construction Spending Unexpectedly Eases in January; Second Straight M/M Decline

  • Total January construction -0.1% (+5.7% y/y); December revised down to -0.7% but November revised up to +1.8%.
  • Residential private construction declines 0.6% (-3.9% y/y), down for eight consecutive months, led by a 1.7% drop (-18.4% y/y) in single-family building.
  • Nonresidential private construction rebounds 0.9% (19.1% y/y), up for the eighth time in nine months.
  • Public sector construction falls 0.6% (+11.1% y/y), down for the second successive month, led by a 0.6% decline (+11.2% y/y) in nonresidential public construction.

The value of construction put in place dipped 0.1% m/m in January after a 0.7% decline in December (-0.4% initially) and a 1.8% gain in November (+0.5% previously), according to the U.S. Census Bureau. The y/y rate decelerated to 5.7% in January, the lowest since February 2021, from 8.7% in December; it was also down from a 11.7% y/y high last February. A 0.2% m/m January increase had been expected in the Action Economics Forecast Survey. The Fed's tightening of monetary policy is continuing to weigh on the housing market.

Private construction was virtually unchanged m/m (4.4% y/y) in January after a 0.8% drop in December (-0.4% initially) and a 1.9% rise in November (+0.5% previously). Residential private construction fell 0.6% (-3.9% y/y), the eighth straight monthly fall, after a 0.9% December decrease (-0.3% initially). Single-family building slid 1.7% (-18.4% y/y), the eighth successive m/m slide, after a 3.0% December decline. Multi-family building, however, grew 0.4% (20.6% y/y), the seventh m/m gain in eight months, on top of a 1.9% December advance. Home improvement building rose 0.3% (9.0% y/y), the third consecutive m/m rise, after a 0.5% December increase.

Nonresidential private construction recovered 0.9% (19.1% y/y) in January, the eighth m/m rise in nine months, following a 0.7% decline in December (-0.5% initially). The January rebound reflected m/m increases of 6.0% (53.8% y/y) in manufacturing construction, 4.7% (11.2% y/y) in religious construction, 1.0% (-6.5% y/y) in utilities private construction, 0.9% (40.5% y/y) in lodging construction, 0.8% (25.9% y/y) in transportation private building, 0.5% (14.5% y/y) in office private building, and 0.2% (3.6% y/y) in communication private construction. To the downside, the following nonresidential private constructions posted their m/m declines in January: commercial (-3.2%; +22.1% y/y), educational (-0.7%; +14.2% y/y), amusement & recreation (-0.4%; +13.7% y/y), and health care (-0.3%; +12.1% y/y).

The value of public construction fell for the second straight in January, falling 0.6% (+11.1% y/y) after a 0.2% December decline (-0.4% initially), reflecting a modest 0.2% increase (7.9% y/y) in residential public construction and a 0.6% drop (+11.2% y/y) in nonresidential public construction. The following nonresidential public constructions registered their m/m decreases in January: water supply (-6.4%; +17.0% y/y), amusement & recreation (-2.5%; +8.0% y/y), sewage & waste disposal (-2.4%; +16.0% y/y), public safety (-2.0%; +8.1% y/y), commercial (-1.6%; +23.3% y/y), educational (-0.6%; +4.5% y/y), and utilities (-0.2%; +16.7% y/y). Notably, spending on highways & streets, which makes up 30.6% of public construction spending, fell 0.9% (+16.4% y/y) following a 1.8% December rebound. In contrast, the following nonresidential public constructions increased m/m in January: conservation & development (8.6%; 21.5% y/y), health care (2.3%; 13.7% y/y), office (2.2%; 9.2% y/y), and transportation (2.0%; 3.1% y/y).

The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.

  • Winnie Tapasanun has been working for Haver Analytics since 2013. She has almost 20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations.   Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia.   A bilingual (English and Thai) with competency in French, Winnie loves to travel (25 countries so far) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.

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