U.S. Construction Spending Unexpectedly Dips in May After Seven Straight Monthly Rises
Summary
• Total construction declines for the first time since September; Apr. and Mar. revised up. • Residential private construction rises for the 24th straight month, led by home improvement building. • Nonresidential private construction declines for the third consecutive month. • Public sector construction falls for the second successive month.
The value of construction put-in-place ticked down 0.1% m/m (+9.7% y/y) in May after upwardly revised rises of 0.8% in April (+0.2% initially) and 0.9% in March (+0.3% previously), according to the U.S. Census Bureau. The May m/m reading was the first monthly decline since September. A 0.5% May increase had been expected in the Action Economics Forecast Survey. The source released the standard annual revisions today.
Private construction was virtually unchanged (+13.2% y/y) in May on top of an upwardly revised 1.1% April increase and six straight m/m advances. Residential private construction grew 0.2% (19.0% y/y) after a 1.7% rise, registering the 24th straight m/m gain. Home improvement building rose 0.6% (34.2% y/y), the 10th successive m/m rise, after a 2.2% increase. Single-family building held steady (+15.1% y/y) following a 1.7% April rise and five consecutive monthly increases. Multi-family building dipped 0.03% (-3.6% y/y) vs. a 0.1% uptick.
Nonresidential private construction fell 0.4% (+3.7% y/y) in May, the third straight m/m fall, after a 0.1% downtick in April. Heath care private construction slid 2.4% (+4.0% y/y), the second consecutive m/m slide. Amusement & recreation private construction dropped 1.5% (+3.8% y/y) vs. a 3.0% rebound. Utilities private construction fell 1.1% (-8.4% y/y), the third successive m/m fall. Commercial building declined 0.9% (+10.9% y/y), the fourth m/m fall in five months. Educational private construction fell back 0.9% (+18.0% y/y), the deepest m/m fall since January. Lodging construction declined 0.3% (-9.8% y/y) vs. a 1.5% rebound. Office building held steady (-3.3% y/y) following a 0.8% rise. To the upside, religious construction rebounded 7.7% (-6.4% y/y) vs. a 11.0% drop. Manufacturing construction grew 1.2% (26.1% y/y), the fourth m/m gain in five months. Transportation building rose 1.0% (-4.6% y/y) following a 1.0% April rise and three consecutive m/m declines. Communication private construction increased 0.2% (-6.1% y/y) vs. five straight m/m drops.
The value of public construction fell 0.8% (-2.7% y/y) in May after a 0.3% decline in April, with residential public construction down 0.7% (-2.7% y/y) and nonresidential public construction down 0.3% (-2.7% y/y). Conservation & development public construction slid 7.3% (+12.0% y/y), the deepest m/m slide since September. Spending on highways & streets, which makes up 28.5% of public construction spending, fell 2.3% (-6.2% y/y) vs. a 0.2% increase. Amusement & recreation public construction decreased 1.4% (-3.5% y/y), reversing a 0.7% April rise. Utilities public construction dropped 0.8% (+40.8% y/y) following four straight monthly gains. Educational public construction fell 0.4% (-6.9% y/y), the third consecutive m/m fall. Water supply construction declined 0.3% (-0.3% y/y) vs. four successive m/m rises. Commercial public construction ticked down 0.1% (-15.0% y/y), the second straight m/m decline. Sewage & waste disposal construction dipped 0.1% (+7.0% y/y), the second consecutive monthly easing. In contrast, public safety construction rebounded 1.5% (-10.0% y/y), the fourth m/m gain in five months. Office public construction rose 0.9% (5.1% y/y) following two successive m/m decreases. Health care public construction was up 0.7% (9.8% y/y) after virtually unchanged.
The construction spending figures, some of which date back to 1946, can be found in Haver's USECON database. The expectations reading is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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