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By: Kendall Jones on January 3rd, 2017

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U.S. Construction Spending in November Highest Since April 2006

Industry News | Blog Posts

According to the latest report from the U.S. Census Bureau, the seasonally adjusted annual rate of construction spending for November 2016 was at an estimated $1,182.1 billion, a 0.9% increase from the previous month. This is the highest it’s been in over a decade, going all the way back to April 2006 when it was $1,192.8 billion.

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October’s annual rate was revised down from $1,172.6 billion to $1,171.4 billion. September’s estimate was also revised down from $1,166.5 billion to $1,164.4 in the latest release.

The November estimate is 4.1% above the $1,135.5 billion from a year ago. Through November 2016, total construction spending for the year was at $1,070.9 billion, 4.4% above the same period last year. Construction spending through the first 11 months of 2015 was at 1,025.5 billion.

Private construction spending for November was estimated at a seasonally adjusted annual rate of $892.8 billion. This is 1.0% higher than October’s estimate which was revised down from $885.9 billion to $884.3 billion. September’s figure was also revised back down from $887.4 billion to $883.6 billion.

Total private construction spending in November was up 4.6% from a year ago. Private nonresidential spending rose 0.9% for the month to $430.0 billion and private residential was up 1.0% for the month to $463.0 billion during November.

The biggest increases in private construction for the month were in Lodging which was up 7.0% and Religious which was up 9.8% from October.

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The seasonally adjusted annual rate of public construction spending for November was estimated at $289.3 billion, just 0.8% above October’s estimate which was revised up from $286.8 billion to $287.1 billion. September’s estimate was revised up again in the latest report from $279.1 billion to $280.8 billion. November’s figure is 2.6% above the November 2015 estimate of 281.8 billion.

The largest monthly increases for public construction spending were in Office which was up 3.1% from October and Conservation and Development which rose 5.0% from the previous month.

According to ConstructConnect’s Chief Economist, Alex Carrick, “It’s encouraging to see that U.S. total construction spending picked up speed in November. The +0.9% gain month-to-month was the best since June (also +0.9%). The only other months in 2016 with comparably favorable increases all came in the first quarter, with January at +1.0%; February, +1.1%; and March, +1.6%.

November’s monthly average year-to-date improvement of +4.7% was helped along more by residential work (+5.4%) than nonresidential (+4.3%). But in the latest three months (i.e., versus the previous three months annualized), it’s been nonresidential (+4.8%) that has been speedier than residential (+3.5%).

Among type-of-structure subcategories, ‘lodging’ and ‘offices’ were the star performers in the first 11 months of 2016, with ‘commercial/retail’ also a perhaps surprising standout.

All of the average year-to-date increase in total capital spending through November 2016 was generated by the private sector (+6.4%), as the public sector (-0.1%) stood watching from the sidelines.”