U.S. Construction Spending Falls 1% in January
The seasonally adjusted annual rate of construction spending for January 2017 was estimated at $1,180.3 billion, according to the latest report from the U.S. Census Bureau. This is 0.1% below the December 2016 estimate which has been revised up from $1,181.5 billion to $1,192.2 billion. November’s estimate was also revised up again from $1,184.4 billion to $1,191.5 billion. January’s estimate is 3.1% higher than a year ago. The estimate for January 2016 was $1,144.9 billion.
Total private construction spending for January rose 0.2% to $911.6 billion over December’s $909.4 billion which has been revised up from an estimated rate of $897.0 billion. November’s seasonally adjusted annual rate was revised up from $894.8 billion to $904.7 billion.
Private residential construction in January was estimated at $476.4 billion, a 0.5% increase from December. Private nonresidential construction was at a seasonally adjusted annual rate of $435.3 billion, virtually unchanged from the month prior.
Public construction spending in January 2017 was down 5.0% from December’s estimate at a seasonally adjusted annual rate of $268.7 billion. December’s estimate was revised down from $284.5 billion to $282.8 billion. November’s estimate was revised down from $289.6 billion to $286.8 billion. All sectors of public construction were down in total spending from the previous month. January’s estimate was also down 9.0% from January 2016 with an estimate of $295.2 billion.
ConstructConnect Chief Economist Alex Carrick shared the following thoughts on the latest Construction Spending report:
“When it comes to the Census Bureau’s put in place construction spending numbers, I’m always most interest in whether or not they appear to be speeding up or slowing down.
The seasonally adjusted (SA) grand capital spending figure in the most recent January was +3.1% year over year. A year ago, in January 2016, it had been +10.3%.
In fact, grand total PIP spending was above +10.0% y/y in each of the first three months of last year.
Total residential construction in this year’s January was +5.5% y/y. That’s about half the rate of increase as was realized in 2016’s January, +11.4%.
In the nonresidential segment of construction (i.e., 59% of the whole), the most growth figure was +1.5% y/y, considerably slower than the +9.6% y/y improvement in the first month of 2016.
Three subcategories of construction are far outperforming all others at present. ‘Lodging’ put in place capital spending in January was +22.2% y/y; ‘office’ work was even better at +28.8% y/y; and what is termed ‘commercial,’ which is mainly retail, was +10.6% y/y.
The uptick in ‘retail’ is surprising to see, given that a number of major ‘bricks and mortar’ retail chains have been making headlines by announcing store closings.
The manufacturing sector, however, continued to disappoint early in 2017. At -6.9% y/y, its investment spending was down for the tenth month in a row.”
The latest release also included the annual value of construction put in place (CPIP) for 2016. Total CPIP was $1,164.4 billion, a 4.7% increase over the $1,112.4 billion in 2015. Total private CPIP for last year was $878.5 billion, up 6.7% over 2015 and total public CPIP in 2016 was $285.8 billion, 1.1% lower than 2015 totals.