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Economy in Brief

U.S. Construction Spending Disappoints in March
by Tom Moeller  May 3, 2021

• Activity improved after severe winter weather limited building activity in February.

• Private nonresidential & public sector building drop.

• Residential building activity is strong.

The value of construction put-in-place improved 0.2% (5.3% y/y) during March after falling 0.6% in February, revised from -0.8%. A 1.5% March increase had been expected in the Action Economics Forecast Survey.

Private construction rose 0.7% (8.6% y/y) in March after falling 0.3%. Nonresidential construction declined 0.9% in March (-9.1% y/y). Transportation building weakened 4.7% (-5.1% y/). Lodging construction fell 2.1% (-24.0% y/y) and education construction declined 2.1% (-18.1% y/y). Commercial building weakened 0.5% (-8.8% y/y) while office building eased 0.4% (-4.2% y/y).

The value of public construction fell 1.5% during March (-4.6% y/y). Spending on highways & streets, which makes up nearly one-third of public spending, declined 2.2% (-10.9% y/y) but outlays on health care units improved 1.6% (7.7% y/y). Power construction rose 0.2% (-4.1% y/y).

Residential construction gained 1.7% (23.3% y/y) as single-family building rose 2.0% (26.7% y/y) after a 0.9% increase. Home improvement expenditures improved 2.0% (21.7% y/y) after falling for two straight months. Multi-family building eased 0.3% (+14.6% y/y) after falling 0.9%.

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, %) Mar Feb Jan Mar Y/Y 2020 2019 2018
Total 0.2 -0.6 0.6 5.3 4.7 2.3 4.1
  Private 0.7 -0.3 0.8 8.6 4.6 0.6 4.0
    Residential 1.7 0.1 1.2 23.3 11.3 -2.5 3.5
    Nonresidential -0.9 -0.9 0.3 -9.1 -2.9 4.4 4.7
  Public -1.5 -1.6 -0.4 -4.6 5.2 8.0 4.4
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