by Calculated Risk on 10/01/2014 10:42:00 AM
Wednesday, October 01, 2014
Construction Spending decreased 0.8% in August
Earlier the Census Bureau reported that overall construction spending decreased in August:
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during August 2014 was estimated at a seasonally adjusted annual rate of $961.0 billion, 0.8 percent below the revised July estimate of $968.8 billion. The August figure is 5.0 percent above the August 2013 estimate of $915.3 billion.Both private and public spending decreased in August:
Spending on private construction was at a seasonally adjusted annual rate of $685.0 billion, 0.8 percent below the revised July estimate of $690.3 billion. Residential construction was at a seasonally adjusted annual rate of $351.7 billion in August, 0.1 percent below the revised July estimate of $352.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $333.3 billion in August, 1.4 percent below the revised July estimate of $338.1 billion. ...Click on graph for larger image.
In August, the estimated seasonally adjusted annual rate of public construction spending was $275.9 billion, 0.9 percent below the revised July estimate of $278.5 billion.
emphasis added
This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.
Private residential spending has declined recently and is 48% below the peak in early 2006 - but up 54% from the post-bubble low.
Non-residential spending is 20% below the peak in January 2008, and up about 48% from the recent low.
Public construction spending is now 14% below the peak in March 2009 and about 7% above the post-recession low.
The second graph shows the year-over-year change in construction spending.
On a year-over-year basis, private residential construction spending is now up 4%. Non-residential spending is up 9% year-over-year. Public spending is up 2% year-over-year.
Looking forward, all categories of construction spending should increase in 2014. Residential spending is still very low, non-residential is starting to pickup, and public spending has probably hit bottom after several years of austerity.
This was a weak report - well below the consensus forecast of a 0.5% increase - and there were also downward revisions to spending in June and July.