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Economy in Brief

U.S. Construction Spending Gives Back Some Prior Gains
by Peter D'Antonio  June 1, 2017

The value of construction put-in-place dipped 1.4% in April, following sharp weather-related gains totaling 3.9% in the first three months of the year. The April decline compares to expectations for a 0.5% gain in the Action Economics Forecast Survey. Despite the latest drop, construction spending was up 6.7% from a year earlier. The March figure was initially reported down 0.2%, but was revised up with the April report to a gain of 1.1%.

Private sector construction activity declined 0.7% in April, but nevertheless increased by 10.4% from a year earlier.

Residential spending declined 0.7% as well (+16.0% y/y), after six months of solid gains. The April decline was centered in the volatile improvements sector, which fell 2.9% (+32.3% y/y). Single-family building improved 0.8% (+7.7% y/y), while multifamily declined 0.2% (+10.3% y/y).

Nonresidential building activity fell 0.6% (+4.3% y/y), which was the third decline in a row. Office construction was the one major sector showing a gain in April, rising 1.8% (+14.8% y/y). Commercial construction eased 0.3% (+13.5% y/y), manufacturing sector construction dropped 1.9% (-8.4% y/y), health care building declined 1.1% (-0.1% y/y), and power plant construction fell 1.4% (+1.5% y/y).

Public sector building activity declined 3.7% (-4.4% y/y), following gains totaling 4.2% in the prior two months. Education facility spending declined 2.0% (-0.2% y/y). Transportation facilities construction was off 2.0% (+2.4% y/y). Highway and streets, which constitutes about one-third of total public construction, dropped 3.7% (+0.3% y/y).

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

Construction Put in Place (SA, %) Apr Mar Feb Apr Y/Y 2016 2015 2014
Total -1.4 1.1 1.9 6.7 4.8 10.3 11.4
  Private -0.7 1.0 1.7 10.4 6.7 12.5 15.4
    Residential -0.7 2.5 4.7 16.0 5.6 16.8 14.6
    Nonresidential -0.6 -0.7 -1.5 4.3 7.8 8.1 16.3
  Public -3.7 1.6 2.5 -4.4 -0.5 4.5 1.9
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