by Bill McBride on 8/01/2012
Catching up … This morning the Census Bureau reported that overall construction spending increased in June:
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2012 was estimated at a seasonally adjusted annual rate of $842.1 billion, 0.4 percent above the revised May estimate of $838.3 billion. The June figure is 7.0 percent above the June 2011 estimate of $786.8 billion.
Private construction spending increased while public spending was flat:
Spending on private construction was at a seasonally adjusted annual rate of $567.9 billion, 0.7 percent above the revised May estimate of $564.2 billion. … In June, the estimated seasonally adjusted annual rate of public construction spending was $274.2 billion, nearly the same as the revised May estimate of $274.1 billion.
This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.
Private residential spending is 61% below the peak in early 2006, and up 19.4% from the recent low. Non-residential spending is 27% below the peak in January 2008, and up about 33% from the recent low.
Public construction spending is now 16% below the peak in March 2009 and near the post-bubble low.
On a year-over-year basis, both private residential and non-residential construction spending are positive, but public spending is down on a year-over-year basis. The year-over-year improvements in private non-residential is mostly related to energy spending (power and electric).
The solid year-over-year increase in private residential investment is a positive for the economy (the increase in 2010 was related to the tax credit). However the recent improvement in residential construction is being somewhat offset by declines in public construction spending.