Construction Spending Relatively Unchanged in May
Construction spending remained relatively unchanged in May with the seasonally adjusted annual rate of construction spending estimated at $1,230.1 billion, according to the latest report from the U.S. Census Bureau. April’s estimate was revised up from $1,218.5 billion to $1,230.4 billion. March’s estimate was revised up again from $1,235.5 billion to $1,239.6 billion.
May’s estimate puts construction spending up 4.5% from a year ago with the May 2016 estimate at $1,177.0 billion. Construction spending has been flat after hitting the record-high of $1,239.6 billion in March. Total construction spending for the first five months of 2017 totaled $469.2 billion. This is 6.1% higher than the $442.2 billion spent during January through May 2016.
Private construction spending for May was at a seasonally adjusted annual rate of $943.2 billion, down 0.6% from April’s estimate which was revised up from $943.3 billion to $949.3 billion. March’s estimate has also been revised up from $949.7 billion to $950.8 billion.
Private nonresidential construction spending was at a seasonally adjusted annual rate of $433.6 billion in May. This is 0.7% below April’s estimate which has been revised up from $429.3 billion to $436.7 billion. Private residential construction spending was down 0.6% in May to $509.6 billion. April’s estimate was revised down from $516.7 billion to $512.7 billion. Total private construction is up 6.2% from a year ago.
Public construction spending was at a seasonally adjusted annual rate of $286.9 billion for May. This a 2.1% increase over April’s estimate which was revised up from $275.3 billion to $281.0 billion. Public construction spending is down 0.6% from a year ago.
ConstructConnect’s Chief Economist Alex Carrick shared his thoughts on the latest construction spending report:
“There wasn’t much drama to be found in the Census Bureau’s latest report on U.S. put-in-place construction spending. The seasonally adjusted (SA) total dollar volume stayed flat in May, after April’s -0.7% month-to-month withdrawal.
"Residential construction’s May dollar volume declined (-0.5% m/m) for only the second time in more than two-and-a-half years, dating back to the summer of 2014. Since then, the single other occasion when housing faltered was in September 2016 (-0.4%).
"Nonresidential construction in May was +0.3% m/m after being -1.5% in April and 0.0% in March.
"To determine which type-of-structure categories have been slowing down or speeding up, I like to compare latest-three-months-over-prior-three-months (annualized) with latest-twelve-months-over-prior-twelve-months. On that basis, several major type-of-structure categories have been hitting the brakes: lodging (-1.7% versus +15.4%); offices (-5.1% versus +20.9%); commercial/retail (-1.8% versus +16.9%); educational facilities (-2.2% versus +4.8%); and power (-14.1% versus +2.7%).
"Moving in the opposite – which is to say, more upbeat – direction have been: health care facilities (+7.2% versus +0.2%); highways and streets (+10.5% versus -1.8%); and manufacturing (+1.3% versus -7.8%).
"It’s also interesting to note that total private construction spending has been decelerating (+0.6% versus +9.3%), while the public sector has grown more aggressive (+7.5% versus -3.3%).
"Not seasonally adjusted (NSA) total construction spending in May was +6.1% year to date versus the first five months of 2016.
"Year-to-date NSA residential work (+12.2%) has been outstripping non-residential activity (+2.0%).
"Finally, within the latter, the building component (+5.6%) has been doing better than heavy engineering/civil (-3.0%).”