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Construction Spending Plunges

Monday, June 6, 2016

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After a strong March, new federal data shows that U.S. construction spending fell 1.8 percent in April—the largest drop since January 2011.

Total construction spending reached $1.13 trillion in April, the Commerce Department reported.

However, overall spending is 4.5 percent above the April 2015 estimate of $1.08 trillion.

construction
© iStock.com / chang

Despite the declines in April, many building categories performed better than they did a year ago.

Private construction dropped 1.5 percent in April, which was the largest decline since January 2013.

During the first four months of this year, construction spending amounted to $334.8 billion, 1.5 percent above the same period in 2015.

Jennifer Lee, senior economist at BMO Capital Markets warned against reading too much into the negative month.

"This series is prone to big revisions," she told the Associated Press. Other experts say the decline represented a payback from a strong beginning of the year, fueled by a mild winter.

Private Construction Declines

Spending on private construction fell 1.5 percent in April from March’s revised level, to a seasonally adjusted annual rate of $843.1 billion. Residential construction spending dipped 1.5 percent and nonresidential construction dropped 1.5 percent.

Total private construction spending was 5.7 percent above April 2015 figures.

The residential segment was at a seasonally adjusted rate of $439.7 billion in April. The segment was up 8 percent from a year ago.

Spending for new single-family homes was at $237.5 billion in April, a 12.9 percent increase from April 2015.

Spending for new multi-family construction reached $60.0 billion, a 21.4 percent increase from the same month a year ago.

Nonresidential private construction was at a seasonally adjusted rate of $403.5 billion in April.

Commercial construction and lodging fell 3.7 percent and 2.0 percent, respectively, in April from March’s revised estimates.

Public Construction

Public construction spending dipped 2.8 percent from March, with educational construction spending dropping 2.5 percent (to $70.0 billion) and highway construction decreasing 6.6 percent (to $89.4 billion).

However, total public construction spending was $290.8 billion for April, which was up 1.2  percent from April 2015 levels.

   

Tagged categories: Commercial Construction; Construction; Department of Commerce; Economy; Government; Public Buildings; Residential Construction; Spending

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