03/27/2014 by Bernard M. Markstein
Total Construction Spending and its Major Components
The U.S. Census Bureau reported that total construction
spending edged up 0.1% in January to $943.1 billion at a seasonally adjusted
annual rate (SAAR). December’s spending number was revised up by $11.4 billion,
1.2% of the previously reported number. As a result, December’s monthly
increase was revised up from +0.1% to +1.5%.
Nonresidential building construction fell 1.0% to $304.2
billion (SAAR) in January. December spending was revised up by $2.7 billion,
0.9% of the previously reported number. However, November spending was revised
down $3.0 billion, 1.0% of the previously reported number. These adjustments
resulted in a revision of the monthly percentage change for November from +0.9%
to -0.1% and for December from -3.1% to -1.3%.
Heavy engineering (non-building) construction spending rose
0.4% to $274.5 billion (SAAR) in January. November spending was revised down by
$2.1 billion, 0.8% of the previously reported number, while December spending
was revised up by $4.9 billion, 1.8% of the previously reported number. As a
result, the monthly percentage change for November was revised from +0.4% to -0.4%
and for December from +0.7% to +3.4%.
Total residential construction spending, which includes
improvements, increased 0.9% in January to $364.5 billion (SAAR) after jumping
2.4% in December. New residential construction spending, which excludes improvements
and which has increased for 28 consecutive months, rose 1.7% to $226.3 billion
in January following a 2.5% advance in December.
U.S. Total Construction Spending
(billions of U.S. current dollars) |
||||||||
Current Monthly (1)
(latest actual values) |
3-Month Moving Average
|
Annual
|
||||||
Nov-13
|
Dec-13
|
Jan-14
|
Nov-13
|
Dec-13
|
Jan-14
|
2012
|
2013
|
|
New Single-family
|
175.9
|
181.9
|
186.0
|
173.5
|
176.7
|
181.2
|
132.0
|
168.9
|
Month-over-Month % Change
|
2.1%
|
3.4%
|
2.3%
|
0.8%
|
1.8%
|
2.6%
|
||
Year-over-year % Change (NSA)
|
18.6%
|
21.7%
|
21.4%
|
20.3%
|
19.5%
|
20.4%
|
22.0%
|
27.9%
|
New Multifamily (2)
|
41.1
|
40.6
|
40.4
|
40.0
|
40.6
|
40.7
|
27.8
|
37.4
|
2.6%
|
-1.2%
|
-0.7%
|
2.6%
|
1.6%
|
0.2%
|
|||
30.8%
|
22.0%
|
21.1%
|
35.4%
|
34.2%
|
21.1%
|
22.6%
|
34.2%
|
|
New Residential (3)
|
217.0
|
222.5
|
226.3
|
213.5
|
217.3
|
221.9
|
159.9
|
206.2
|
2.2%
|
2.5%
|
1.7%
|
1.1%
|
1.8%
|
2.1%
|
|||
20.7%
|
21.7%
|
21.3%
|
22.1%
|
21.0%
|
21.2%
|
22.1%
|
29.0%
|
|
Residential Improvements (4)
|
135.6
|
138.7
|
138.1
|
134.7
|
136.0
|
137.5
|
126.7
|
131.0
|
1.6%
|
2.3%
|
-0.4%
|
4.0%
|
0.9%
|
1.1%
|
|||
8.5%
|
12.9%
|
6.5%
|
8.9%
|
13.9%
|
9.2%
|
4.0%
|
3.5%
|
|
Total Residential (5) (6)
|
352.6
|
361.2
|
364.5
|
348.2
|
353.2
|
359.4
|
286.5
|
337.3
|
2.0%
|
2.4%
|
0.9%
|
2.2%
|
1.4%
|
1.8%
|
|||
16.0%
|
18.5%
|
15.7%
|
16.5%
|
18.2%
|
16.7%
|
13.4%
|
17.7%
|
|
Nonresidential Building
|
311.2
|
307.3
|
304.2
|
307.9
|
310.0
|
307.5
|
298.5
|
298.6
|
-0.1%
|
-1.3%
|
-1.0%
|
1.1%
|
0.7%
|
-0.8%
|
|||
6.2%
|
3.9%
|
5.1%
|
3.1%
|
4.4%
|
5.1%
|
5.1%
|
0.0%
|
|
Heavy Engineering (Non-Building)
|
264.5
|
273.4
|
274.5
|
266.4
|
267.8
|
270.8
|
272.0
|
263.3
|
-0.4%
|
3.4%
|
0.4%
|
-1.0%
|
0.5%
|
1.1%
|
|||
-17.1%
|
-9.9%
|
6.9%
|
-8.2%
|
-12.2%
|
-8.6%
|
8.2%
|
-3.2%
|
|
Total (6)
|
928.3
|
941.9
|
943.1
|
922.6
|
931.0
|
937.8
|
857.0
|
899.2
|
0.6%
|
1.5%
|
0.1%
|
0.9%
|
0.9%
|
0.7%
|
|||
1.1%
|
3.8%
|
9.4%
|
3.8%
|
3.1%
|
4.4%
|
8.7%
|
4.9%
|
|
(1) Monthly levels are seasonally adjusted at annual rates
(SAAR figures).
(2) New Multifamily = New Private Multifamily + New Public Multifamily - Public Improvements (estimated by Reed Economics) (3) New Residential = New Single-family + New Multifamily (4) Residential Improvements include remodeling, renovation and replacement work. Number also includes Reed Economics estimate of improvements to public housing. (5) Total Residential = New Single-family + New Multifamily + Residential Improvements. (6) Total may not equal the sum of its components due to rounding. Source: Census Bureau, U.S. Department of Commerce. |
||||||||
Total public construction spending was down 0.8% at a
seasonally adjusted (SA) rate in January after increasing 0.4% in December.
Total private construction spending was up 0.5% in January after jumping 1.9%
in December.
Public and Private Construction Spending
(billions of U.S. current dollars) |
|||||||||
Monthly Figures (1)
(latest actual values) |
3-Month Moving Average
|
Annual
|
|||||||
Nov-13
|
Dec-13
|
Jan-14
|
Nov-13
|
Dec-13
|
Jan-14
|
2011
|
2012
|
2013
|
|
Private Spending
|
654.9
|
667.5
|
670.8
|
648.6
|
656.2
|
664.4
|
501.6
|
577.9
|
627.4
|
Month-over-Month % Change
|
1.3%
|
1.9%
|
0.5%
|
1.5%
|
1.2%
|
1.2%
|
|||
Year-over-year % Change (NSA)
|
2.3%
|
4.8%
|
12.9%
|
5.6%
|
4.4%
|
6.2%
|
0.2%
|
15.2%
|
8.6%
|
Public Spending
|
273.4
|
274.4
|
272.3
|
273.9
|
274.8
|
273.4
|
286.4
|
279.0
|
271.8
|
-1.1%
|
0.4%
|
-0.8%
|
-0.5%
|
0.3%
|
-0.5%
|
||||
-1.8%
|
1.6%
|
0.7%
|
-0.1%
|
0.1%
|
0.0%
|
-5.8%
|
-2.6%
|
-2.6%
|
|
Total Federal Spending
|
23.1
|
23.4
|
23.0
|
23.2
|
23.5
|
23.2
|
31.7
|
27.4
|
23.5
|
-4.0%
|
1.6%
|
-2.0%
|
-0.2%
|
1.3%
|
-1.5%
|
||||
-14.4%
|
-10.6%
|
-4.6%
|
-12.2%
|
-12.8%
|
-10.2%
|
1.7%
|
-13.5%
|
-14.1%
|
|
Federal Nonresidential
Spending |
21.7
|
22.2
|
21.7
|
21.9
|
22.2
|
21.9
|
29.1
|
25.8
|
22.1
|
-3.7%
|
2.1%
|
-2.4%
|
0.0%
|
1.4%
|
-1.4%
|
||||
-14.4%
|
-9.7%
|
-3.6%
|
-12.5%
|
-12.9%
|
-9.6%
|
2.4%
|
-11.4%
|
-14.4%
|
|
Federal Residential
Spending |
1.3
|
1.2
|
1.3
|
1.3
|
1.3
|
1.3
|
2.6
|
1.6
|
1.4
|
-8.3%
|
-6.1%
|
6.3%
|
-3.7%
|
0.0%
|
-3.1%
|
||||
-13.7%
|
-24.6%
|
-17.4%
|
-7.6%
|
-12.3%
|
-18.8%
|
-5.7%
|
-38.2%
|
-9.0%
|
|
Total State & Local Spending
|
250.4
|
251.0
|
249.4
|
250.7
|
251.3
|
250.2
|
254.8
|
251.7
|
248.3
|
-0.9%
|
0.2%
|
-0.6%
|
-0.5%
|
0.2%
|
-0.4%
|
||||
-0.5%
|
3.1%
|
1.4%
|
1.1%
|
1.4%
|
1.2%
|
-6.6%
|
-1.2%
|
-1.4%
|
|
State & Local
Nonresidential Spending |
246.1
|
247.0
|
246.1
|
246.5
|
247.1
|
246.4
|
248.8
|
247.0
|
243.8
|
-0.9%
|
0.4%
|
-0.3%
|
-0.4%
|
0.3%
|
-0.3%
|
||||
-0.2%
|
3.3%
|
1.9%
|
1.3%
|
1.7%
|
1.5%
|
-6.2%
|
-0.7%
|
-1.3%
|
|
State & Local Residential
Spending |
4.3
|
4.0
|
3.2
|
4.3
|
4.2
|
3.8
|
6.0
|
4.7
|
4.5
|
1.4%
|
-7.6%
|
-19.5%
|
-4.8%
|
-1.9%
|
-8.3%
|
||||
-12.0%
|
-8.6%
|
-22.7%
|
-9.3%
|
-10.0%
|
-14.0%
|
-21.3%
|
-21.5%
|
-4.5%
|
|
Monthly levels are seasonally adjusted at annual rates
(SAAR figures).
Source: Census Bureau, U.S. Department of Commerce. |
|||||||||
The Economy
The unusually bad winter weather has taken its toll on the
economy, disrupting transportation, keeping workers and shoppers home, and
delaying many construction projects. These effects are showing up in some of
the economic data. There is still some dispute among analysts as to whether the
less than desirable numbers are due to weather or a slowdown in the economy. At
this point, as we dig through the data, we are most comfortable with the
weather explanation. To the extent this is the correct view, the March, April,
and May data will show significant improvement as companies try to recoup the
delayed activity.
The outlook for the economy remains positive, although
potential stumbling blocks remain. These include the possibility of adverse
developments overseas such as in the European Union or the situation in the
Ukraine. At home, the Federal Reserve continues to throttle back its program of
asset purchases, known as Quantitative Easing. A spike in interest rates due to
a too rapid unwinding of the program would hurt the economy.
The Forecast
The Reed forecast assumes these possible developments are
avoided or their effects are minimized, and that the economy exhibits moderate
growth this year and next. Nonresidential building construction is forecast to
slowly improve this year and next as the economy strengthens.
Heavy engineering (non-building) construction will also be
on the upswing this year and next. We are forecasting legislation to provide
more federal funding for infrastructure projects to pass and be signed into law
this year. Even with this infusion of money, relatively low levels of public
funding for infrastructure projects will be the major factor limiting growth in
this area. Public-private partnerships will remain a viable way to move
underfunded local and state infrastructure projects forward.
Total construction spending is forecast to increase 10.1% in
2014 and 11.3% in 2015 as nonresidential and heavy engineering construction
gain stronger footing and residential construction continues to improve.
U.S. Total Construction Spending
(billions of U.S. current dollars) |
|||||||
Actual
|
Forecast
|
||||||
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
|
New Single-family
|
105.3
|
112.6
|
108.2
|
132.0
|
168.9
|
202.5
|
245.7
|
Year-over-year % Change
|
-43.3%
|
6.9%
|
-3.9%
|
22.0%
|
27.9%
|
19.9%
|
21.4%
|
New Multifamily (1)
|
35.9
|
24.1
|
22.7
|
27.8
|
37.4
|
42.7
|
46.9
|
-30.0%
|
-32.9%
|
-5.7%
|
22.6%
|
34.2%
|
14.4%
|
9.7%
|
|
New Residential (2)
|
141.2
|
136.7
|
130.9
|
159.9
|
206.2
|
245.2
|
292.6
|
-40.4%
|
-3.2%
|
-4.2%
|
22.1%
|
29.0%
|
18.9%
|
19.3%
|
|
Residential Improvements (3)
|
112.7
|
112.5
|
121.8
|
126.7
|
131.0
|
142.8
|
156.8
|
-6.6%
|
-0.2%
|
8.3%
|
4.0%
|
3.5%
|
9.0%
|
9.8%
|
|
Total Residential (4) (5)
|
253.9
|
249.1
|
252.7
|
286.5
|
337.3
|
388.0
|
449.4
|
-29.0%
|
-1.9%
|
1.4%
|
13.4%
|
17.7%
|
15.0%
|
15.8%
|
|
Nonresidential Building
|
375.7
|
290.4
|
284.0
|
298.5
|
298.6
|
319.7
|
347.1
|
-14.2%
|
-22.7%
|
-2.2%
|
5.1%
|
0.0%
|
7.1%
|
8.6%
|
|
Heavy Engineering (Non-Building)
|
273.5
|
265.0
|
251.3
|
272.0
|
263.3
|
281.9
|
305.5
|
0.5%
|
-3.1%
|
-5.2%
|
8.2%
|
-3.2%
|
7.1%
|
8.4%
|
|
Total (5)
|
903.2
|
804.6
|
788.0
|
857.0
|
899.2
|
989.6
|
1,101.9
|
-15.4%
|
-10.9%
|
-2.1%
|
8.7%
|
4.9%
|
10.1%
|
11.3%
|
|
(1) New Multifamily = New Private Multifamily + New Public
Multifamily - Public Improvements
(estimated by Reed Economics) (2) New Residential = New Single-family + New Multifamily (3) Residential Improvements include remodeling, renovation and replacement work. Number also includes Reed Economics estimate of improvements to public housing. (4) Total Residential = New Single-family + New Multifamily + Residential Improvements. (5) Total may not equal the sum of its components due to rounding. Source: Census Bureau, U.S. Department of Commerce. Forecast: Reed Construction Data. |
|||||||
Source: REED
Construction Data
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