U.S. Construction Spending Unexpectedly Dips in May Following a String of Increases
Summary
- May construction spending -0.1% m/m; +6.4% y/y, the lowest since July ’23.
- Residential private construction down 0.2% m/m, led by a 0.7% drop in single-family building.
- Nonresidential private construction down 0.3% m/m, the fourth straight m/m fall.
- Public sector construction up 0.5% m/m, reflecting m/m gains in both residential & nonresidential public buildings.
The value of construction put in place slipped 0.1% m/m in May after upwardly revised rises of 0.3% in April (-0.1% initially) and 0.1% in March (-0.2% previously), according to the U.S. Census Bureau. The May reading was the first m/m easing since October 2022. A 0.3% m/m May increase had been expected in the Action Economics Forecast Survey. The year-on-year rate decelerated to 6.4% in May, the lowest since July 2023, from 7.6% in April. The latest y/y figure was above 4.2% in May 2023 and a low of 3.8% in April 2023; nevertheless, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022. (Note: The Census Bureau released standard annual revisions today along with May 2024 data; not seasonally adjusted series were revised back to 2022 and seasonally adjusted series were revised back to 2017.)
Private construction was down 0.3% (+5.4% y/y) in May following a 0.4% gain in April (-0.1% initially) and a 0.2% decline in March (-0.6% previously). Residential private construction fell 0.2% (+6.5% y/y) in May, the second m/m fall in three months, after a 0.9% rise in April. Single-family building dropped 0.7% (+13.8% y/y) after a 0.2% April decline; it was 47.5% of the residential private construction. Multi-family building was virtually unchanged m/m (-4.6% y/y) in May following five consecutive m/m decreases; it was 14.3% of the residential private construction. To the upside, home improvement building rose 0.3% (2.8% y/y), the fifth m/m rise in six months, after a 2.9% April rebound; it was 38.2% of the residential private construction.
Nonresidential private construction fell 0.3% (+4.1% y/y) in May after falling at the same rate in April, registering the fourth successive m/m decrease. The May fall reflected m/m drops in the following nonresidential private constructions. These included educational (-3.4%; +6.0% y/y), religious (-2.9%; +16.8% y/y), health care (-2.2%; +2.0% y/y), office (-1.7%; -1.7% y/y), utilities (-0.8%; +8.3% y/y), amusement & recreation (-0.7%; -6.6% y/y), commercial (-0.6%; -13.5% y/y), and lodging (-0.1%; -10.0% y/y). In contrast, the following private constructions rose m/m in May: manufacturing (1.3%; 20.2% y/y), transportation (1.2%; 2.3% y/y), and communication (0.6%; 2.2% y/y).
The value of public construction rose 0.5% (9.7% y/y) in May, the third m/m rise in four months, after holding essentially steady in April (-0.2% initially), reflecting increases of 2.6% (15.0% y/y) in residential public construction (the fifth m/m gain in six months) and 0.4% (9.6% y/y) in nonresidential public construction. The May rise reflected m/m increases in the following nonresidential public constructions. These included sewage & waste disposal (2.9%; 11.2% y/y), health care (1.9%; 6.8% y/y), commercial (1.5%; 0.5% y/y), amusement & recreation (0.8%; 13.4% y/y), transportation (0.7%; 2.5% y/y), educational (0.6%; 6.6% y/y), office (0.6%; 9.2% y/y), public safety (0.2%; 30.5% y/y), and water supply (0.1%; 13.4% y/y). To the downside, transportation public constructions for utilities (-0.7%; +28.1% y/y) and conservation & development (-0.6%; -5.2% y/y) fell m/m in May. Notably, spending on highways & streets, which made up 30.3% of public construction spending, slid 0.5% (+9.2% y/y), the fourth m/m slide in five months, on top of a 0.7% April drop.
The construction figures can be found in Haver's USECON database. The expectations figure is from the Action Economics Forecast Survey in AS1REPNA.
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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