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Economy in Brief

U.S. Construction Spending Strengthens Again in January
by Tom Moeller  March 1, 2021

• Overall activity sets another record. 

• Residential building's surge led by single-family sector.

• Public-sector building strengthens.

Building activity continues to strengthen. The value of construction put-in-place increased 1.7% during January (5.8% y/y) following December's 1.1% gain, revised from 1.0%. A 0.7% January increase had been expected in the Action Economics Forecast Survey.

Private construction increased 1.7% (6.8% y/y) in January following a 1.5% December rise. Residential construction jumped 2.5% (21.0% y/y) as single-family building surged 3.0% (24.2% y/y), the seventh consecutive month of notably strong increase. Home improvement expenditures strengthened 2.3% (17.9% y/y) after rising 1.8%. The value of multi-family construction edged 0.7% higher (16.9% y/y) following a 0.2% rise.

Nonresidential private construction improved 0.4% in January (-10.1% y/y) following six consecutive monthly declines. Transportation building rose 1.0% (-2.7% y/), strong for the fifth straight month. Lodging construction rose 0.7% (-22.7% y/y) while commercial building weakened 1.8% (-8.3% y/y). Manufacturing construction rose 4.9% (-14.7% y/y) as education construction edged 0.4% higher (-15.7% y/y). Office building eased 0.2% (-4.4% y/y) about as it did in December.

Public construction rose 1.7% during January (2.9% y/y) following a 0.1% December uptick. Spending on highways & streets, which makes up nearly one-third of public spending, surged 5.8% (6.5% y/y) and outlays on health care units improved 0.9% (9.1% y/y). Power construction improved 0.2% (-4.0% y/y) while spending on educational buildings was little changed (0.9% y/y).

The construction spending figures, some of which date back to 1946 can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.

Construction Put in Place (SA, %) Jan Dec Nov Jan Y/Y 2020 2019 2018
Total 1.7 1.1 1.4 5.8 4.6 2.3 4.1
  Private 1.7 1.5 1.5 6.8 4.5 0.6 4.0
    Residential 2.5 3.8 3.1 21.0 11.1 -2.5 3.5
    Nonresidential 0.4 -1.9 -0.7 -10.1 -3.0 4.4 4.7
  Public 1.7 0.1 1.1 2.9 5.2 8.0 4.4
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