U.S. Construction Spending Posted Solid Increase in January
by:Sandy Batten
|in:Economy in Brief
Summary
- Much larger-than expected gain in January with upward revisions to both December and November.
- Led by private nonresidential construction.
- Public sector construction rebounded after December drop.
The value of construction put-in-place jumped up 1.3% m/m (8.2% y/y) in January after an upwardly revised 0.8% m/m increase in December (initially 0.2%) and an upwardly revised 1.0% m/m gain in November (previously 0.6% m/m). The Action Economics Forecast Survey has looked for a modest 0.3% m/m rise in January.
Private construction increased a solid 1.5% m/m (11.0% y/y) in January following upwardly revised increases in both December and November. The originally reported 0.7% m/m increase in December was revised up to 1.3% while the 0.8% rise previously reported for November was bumped up to a 1.3% m/m gain. Private residential construction increased 1.3% m/m (13.4% y/y) with increases in both single family construction (1.2% m/m) and home improvements (1.8% m/m) while multi-family construction edged down 0.1% m/m, their second monthly decline in the past three months.
Private nonresidential construction rose 1.8% (7.3% y/y) in January after having slipped 0.2% m/m in December. The January gain was concentrated in manufacturing construction, which rebounded 8.5% m/m following a 3.9% slump in December, power (2.7% m/m) and transportation (1.5% m/m). Declines were relatively wide spread with the largest in religious construction (-3.4% m/m), its fifth monthly decline in the past six months.
The value of public construction rose 0.6% m/m (-1.3% y/y) in January following a 1.0% m/m decline in December (revised up from a 1.6% m/m drop) and a 0.1% decrease in November. The January rebound was led by a 3.6% m/m increase in public residential construction, only the second monthly increase in the past six months. Public nonresidential construction rose a more modest 0.5% following a 1.0% m/m decline in December. The two largest components of public nonresidential construction underperformed in January. The largest, highway and street construction, slipped 0.1% m/m, the first monthly decline in seven months. The second largest, education construction, was essentially unchanged in January after having fallen in two of the previous three months. By contrast, health care construction posted a solid 5.9% m/m increase in January, more than offsetting a 3.9% m/m decline in December. Conservation and development construction, though comparatively small, jumped up 8.3% m/m in January.
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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