Construction Spending Down 1.4 Percent in April
The seasonally adjusted annual rate of construction spending fell 1.4% in April to an estimated $1,218.5 billion, according to the latest report from the U.S. Census Bureau. March’s estimate was revised up from $1,218.3 billion to $1,235.5 billion, a new record high. February’s estimate was also revised up again from $1,220.7 billion to $1,221.7 billion.
April’s estimate is 6.7% higher than a year ago with the April 2016 estimate at $1,142.5 billion. While construction spending did decline in April 2017, it wasn’t nearly as much as the 2.9% fall we saw in April 2016. Total construction spending for the first four months of 2017 totaled $359.5 billion. This is 5.8% higher than the $339.7 billion spent during January through April 2016.
Private construction spending for April was at a seasonally adjusted annual rate of $943.3 billion, which is down 0.7% from March’s estimate which has been revised up from $940.2 billion to $949.7 billion. February’s private construction spending estimate was revised up slightly from $940.1 billion to $940.3 billion.
Private residential construction spending was down 0.7% in April to $516.7 billion. The March 2017 estimate was revised up from $503.4 billion to $520.4 billion. Private nonresidential construction spending for April was estimated at $426.6 billion. This is 0.6% below March’s estimate which has been revised down from $436.8 billion to $429.3 billion. Total private construction is up 10.4% from a year ago.
Public construction spending was at a seasonally adjusted annual rate of $275.3 billion in April. This is down 3.7% from March’s estimate which was revised up from $278.1 billion to $285.9 billion. Public construction spending is down 4.4% from a year ago.
ConstructConnect’s Chief Economist Alex Carrick shared his thoughts on the latest construction spending report:
“The Census Bureau is reporting a seasonally adjusted total construction put-in-place value for April that is -1.4% versus March, but +6.7% compared with April of last year.
“As for major subsectors, both residential and nonresidential recorded month-to-month declines, -0.9% and -1.7% respectively, but the former was +15.6% year over year while the latter stayed almost flat, +0.8%.
“Year-to-date, the monthly average of SA total construction has been +5.5%, with residential +11.3% and non-residential, +1.6%.
“To obtain a sense of which type-of-structure subsectors are coming on strong versus those that are faltering, I like to compare year-to-date results with latest three months versus prior three months, annualized.
“On the foregoing basis, residential work has been seriously heating up. Whereas homebuilding activity was +11.3% January-to-April of this year versus January-to-April of last year, it was +35.0% (annualized) in the latest three months versus prior three months.
“Nonresidential has been slightly ahead year-to-date, +1.6%, but has tailed off in the latest three months, -3.1%. Whereas ‘lodging’ (+11.0%), ‘offices’ (+17.1%) and ‘commercial’ (+12.6%) have all been moderately positive year-to-date, each has stumbled on a 3-month-over-3-month basis, by -9.8%, -17.9% and -1.3% respectively.
“On the plus side, ‘highway and street’ work is -3.3% year to date, but it is +8.8% (3-months-over-3-months annualized) more recently.
“Finally, spending on manufacturing facilities has been contracting both year to date, -8.3%, and in the latest three months, -7.7% (annualized).
“The bottom line is that housing construction has been breaking out, but non-housing has been behaving sluggishly.”