Tag Archives: United States Department of Commerce

CR: Construction Spending increased in February

Construction Spending increased in February

by Bill McBride on 4/01/2013 

Catching up …

The Census Bureau reported that overall construction spending increased in February:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during February 2013 was estimated at a seasonally adjusted annual rate of $885.1 billion, 1.2 percent above the revised January estimate of $874.8 billion. The February figure is 7.9 percent above the February 2012 estimate of $820.7 billion.

Both private construction and public construction spending increased:

Spending on private construction was at a seasonally adjusted annual rate of $613.0 billion, 1.3 percent above the revised January estimate of $605.2 billion. Residential construction was at a seasonally adjusted annual rate of $303.4 billion in February, 2.2 percent above the revised January estimate of $296.9 billion. …

February, the estimated seasonally adjusted annual rate of public construction spending was $272.1 billion, 0.9 percent above the revised January estimate of $269.6 billion.

Private Construction Spending Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 55% below the peak in early 2006, and up 36% from the post-bubble low. Non-residential spending is 25% below the peak in January 2008, and up about 37% from the recent low.

Public construction spending is now 16% below the peak in March 2009 and just above the lowest level since 2006 (not inflation adjusted).

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 20%. Non-residential spending is up 6% year-over-year mostly due to energy spending (power and electric). Public spending is down 1.5% year-over-year.

A few key themes:
1) Private residential construction is usually the largest category for construction spending, but there was a huge collapse in spending following the housing bubble (as expected).  Private residential is now about even with private non-residential, and residential will probably be the largest category of construction spending in 2013.  Usually private residential construction leads the economy, so this is a good sign going forward.

2) Private non-residential construction spending usually lags the economy.  There was some increase this time, mostly related to energy and power – but the key sectors of office, retail and hotels are still at very low levels.

3) Public construction spending has declined to 2006 levels (not adjusted for inflation).  This has been a drag on the economy for 4 years.

Read more at http://www.calculatedriskblog.com/2013/04/construction-spending-increased-in.html#Eg0Yro8gR0suq4mr.99

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Construction Spending declined in November

Construction Spending declined in November

by Bill McBride on 1/02/2013  

In November 2012, private residential construction spending was the largest category for the first time since 2007 – but spending is still very low (at 1998 levels not adjusted for inflation). Note: Residential construction is usually the largest category for construction spending, but there was a huge collapse in spending following the housing bubble (as expected).

The Census Bureau reported that overall construction spending decreased in November:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November 2012 was estimated at a seasonally adjusted annual rate of $866.0 billion, 0.3 percent below the revised October estimate of $868.2 billion. The November figure is 7.7 percent above the November 2011 estimate of $804.0 billion.

Private residential construction spending increased, but both private non-residential and public construction spending declined:

Spending on private construction was at a seasonally adjusted annual rate of $589.8 billion, 0.2 percent below the revised October estimate of $590.8 billion. Residential construction was at a seasonally adjusted annual rate of $295.3 billion in November, 0.4 percent above the revised October estimate of $294.2 billion. Nonresidential construction was at a seasonally adjusted annual rate of $294.5 billion in November, 0.7 percent below the revised October estimate of $296.5 billion. … In November, the estimated seasonally adjusted annual rate of public construction spending was $276.2 billion, 0.4 percent below the revised October estimate of $277.4 billion.

Private Construction SpendingClick on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 56% below the peak in early 2006, and up 33% from the post-bubble low. Non-residential spending is 29% below the peak in January 2008, and up about 30% from the recent low.

Public construction spending is now 15% below the peak in March 2009 and just above the post-bubble low.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 19%. Non-residential spending is up 8% year-over-year mostly due to energy spending (power and electric). Public spending is down 3% year-over-year.

Read more at http://www.calculatedriskblog.com/2013/01/construction-spending-declined-in.html#YKc4OvVJiVB0fShr.99

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Construction Spending increased in September

Construction Spending increased in September

by Bill McBride on 11/01/2012  

Three key construction spending themes:

• Private residential construction spending is still very low, but increasing. Residential construction declined sharply for four years following the peak of the housing bubble, and then move mostly sideways for another three years.

• Private non-residential construction spending picked up last year mostly due to energy spending (power and electric), but spending on office buildings, hotels and malls is still very low.

• Public construction spending is down 4% year-over-year and has been declining for several years.

The Census Bureau reported that overall construction spending increased in September:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during September 2012 was estimated at a seasonally adjusted annual rate of $851.6 billion, 0.6 percent above the revised August estimate of $846.2 billion. The September figure is 7.8 percent above the September 2011 estimate of $790.3 billion.

Private construction spending increased and public spending declined:

Spending on private construction was at a seasonally adjusted annual rate of $580.5 billion, 1.3 percent above the revised August estimate of $572.8 billion. … In September, the estimated seasonally adjusted annual rate of public construction spending was $271.1 billion, 0.8 percent below the revised August estimate of $273.4 billion.

Private Construction SpendingClick on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 58% below the peak in early 2006, and up 29% from the post-bubble low. Non-residential spending is 29% below the peak in January 2008, and up about 29% from the recent low.

Public construction spending is now 17% below the peak in March 2009 and at the post-bubble low.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 21%. Non-residential spending is also up 9% year-over-year mostly due to energy spending (power and electric). Public spending is down 4% year-over-year.

Read more at http://www.calculatedriskblog.com/2012/11/construction-spending-increased-in.html

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Construction Spending decreased in August

Construction Spending decreased in August

by Bill McBride on 10/01/2012  

Note: There were upward revisions to construction spending for June and July (especially for residential investment). Without the upward revisions, construction spending would have increased in August compared to July.

This morning the Census Bureau reported that overall construction spending decreased in August:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during August 2012 was estimated at a seasonally adjusted annual rate of $837.1 billion, 0.6 percent below the revised July estimate of $842.0 billion. The August figure is 6.5 percent above the August 2011 estimate of $786.3 billion.

Both private construction spending and public spending declined:

Spending on private construction was at a seasonally adjusted annual rate of $562.2 billion, 0.5 percent below the revised July estimate of $564.8 billion. … In August, the estimated seasonally adjusted annual rate of public construction spending was $274.9 billion, 0.8 percent below the revised July estimate of $277.2 billion.

Private Construction SpendingClick on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending is 60% below the peak in early 2006, and up 23% from the post-bubble low. Non-residential spending is 30% below the peak in January 2008, and up about 27% from the recent low.

Public construction spending is now 16% below the peak in March 2009 and near the post-bubble low.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 18%. Non-residential spending is also up 7% year-over-year mostly due to energy spending (power and electric). Public spending is down 3% year-over-year.

UPDATE: Apparently I wasn’t clear – spending in August would have been up compared to July without the upward revision to July spending. With both June and July revised up, this report was decent. Residential construction spending was up in August, and 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).

Read more at http://www.calculatedriskblog.com/2012/10/construction-spending-decreased-in.html

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Construction Spending in June: Private spending increases, Public Spending flat

Construction Spending in June: Private spending increases, Public Spending flat

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.

Private Construction SpendingClick on graph for larger image.

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.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

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.

Read more at http://www.calculatedriskblog.com/2012/08/construction-spending-in-june-private.html

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Housing to the Rescue Again? — PRAGCAP

Housing to the Rescue Again?

I got this email from Warren Mosler this morning.  He wrote:

“Looks to me like housing is finally in a very sustainable uptrend, supported by adequate federal deficit spending, modestly improving personal income, relatively high affordability, low consumer debt ratios, very low levels of actual inventory,tightening rental markets, etc. etc.

And looks to me that housing starts could double and still be at relatively low levels, so there’s years of upside with modest growth rates.

It also means GDP could gravitate up to the 3-4% range by year end, and stay above 0% even should we go over the fiscal cliff.”

The big thing is that it would be very unusual for GDP to contract with this sort of activity in the housing market starting to pick-up.  It’s just not consistent at all with recession.  As you can see in the chart below housing starts are always declining heading into a recession.  Granted, they’re not exactly booming right now, but this still isn’t consistent with recession.   I still think 2013 is the year of recession risk (maybe, just maybe Q4 2012 if the fiscal cliff actually materializes).  So I wouldn’t put me in the “very sustainable” housing recovery camp (I think we’re in for a post-bubble work out so there will be no bottoming “event” in housing).  But this seems to be a bit of good news for now in an otherwise sea of bad news…..

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Construction Spending in May: Private spending increases, Public Spending declines

Construction Spending in May: Private spending increases, Public Spending declines

by Bill McBride on 7/02/2012  

Catching up … This morning the Census Bureau reported that overall construction spending increased in May:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during May 2012 was estimated at a seasonally adjusted annual rate of $830.0 billion, 0.9 percent above the revised April estimate of $822.5 billion. The May figure is 7.0 percent above the May 2011 estimate of $775.8 billion.

Private construction spending increased while public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $560.4 billion, 1.6 percent above the revised April estimate of $551.8 billion. … In May, the estimated seasonally adjusted annual rate of public construction spending was $269.6 billion, 0.4 percent below the revised April estimate of $270.7 billion.

Private Construction SpendingClick on graph for larger image.

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 17% from the recent low. Non-residential spending is 28% below the peak in January 2008, and up about 30% from the recent low.

Public construction spending is now 17% below the peak in March 2009 and at a new post-bubble low.

Private Construction SpendingThe second graph shows the year-over-year change in construction spending.

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 year-over-year improvement in private residential investment is an important change (the positive in 2010 was related to the tax credit). Construction is now the “bright spot” for the economy, however the improvement in residential construction is being somewhat offset by declines in public construction spending.

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