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Economy in Brief

U.S. Construction Activity Reverses Earlier Gain
by Tom Moeller  June 1, 2016

Strength in building activity has waned recently. The value of construction put-in-place declined 1.8% during April (+4.5% y/y) following a 1.5% March rise, revised from 0.3%. February's 1.4% gain also was revised from 1.0%. A 0.5% increase was expected in the Action Economics Forecast Survey.

Building activity in the private sector declined 1.5% led by the same 1.5% drop in residential building activity, which reversed half of a March increase. Multi-family building activity declined 3.1% (+20.6% y/y) following a 6.6% rise, and spending on improvements fell 3.2% (-0.8% y/y) on the heels of a 7.3% jump. Single-family construction was little-changed m/m (+12.8% y/y) after a 0.3% rise.

The value of nonresidential building activity declined 1.5%(+3.5% y/y) following a 1.3% rise. Office construction rose 1.6% (24.2% y/y) and transportation activity gained 1.8% (14.7% y/y). A 3.6% decline (+4.7% y/y) in commercial construction offset these increases along with a 1.5% drop (-2.0% y/y) in factory sector building.

Public sector building activity declined 2.8% (-0.6% y/y) after a 0.6% easing. Highway & street construction fell 6.6% (-0.3% y/y) following sharp volatility earlier this year. Commercial construction declined 4.1% (+61.8% y/y) after 12.6% growth, but water supply activity eased just 0.4% (-2.8% y/y), the same as in March. Power construction rebounded 5.2% (-11.7% y/y) after a 15.0% shortfall.

The construction spending figures are in Haver's USECON database and the expectations figure is contained in the AS1REPNA database.

Construction Put in Place (SA, %) Apr Mar Feb Apr Y/Y 2015 2014 2013
Total -1.8 1.5 1.4 4.5 10.6 9.6 6.6
  Private -1.5 2.3 1.8 6.2 12.5 12.9 11.3
    Residential -1.5 3.2 2.6 8.7 13.0 14.4 19.9
    Nonresidential -1.5 1.3 0.9 3.5 11.9 11.3 3.6
  Public -2.8 -0.6 0.5 -0.6 5.7 1.9 -3.1
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