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Construction Spending: Slower to Start Year

March 1, 2017
Bottom Line: Public construction fell sharply in January while private residential construction continued to grow, climbing at a 12% annualized rate in the last three months. Non-residential continued to rebound and has now grown 8% annualized in the last three months. Public construction remains a drag on total construction, falling 5% in January and 24% annualized in the last three months. Overall, construction spending is now 3.2% above its year ago levels. With growth for all of 2016 revised higher to 5.2% after 8.7% in 2015, the trend remains towards deceleration in construction growth.

Construction Spending FELL by 1.0% in January, compared with market expectations for an increase of 0.5%. The December estimate was revised modestly higher from -0.2% to 0.1%, while the November, estimate was revised modestly higher from 0.9% to 1.5%. Construction spending is now 3.1% ABOVE its year ago level but still 2.1% below its March 2006 peak.

Residential Construction ROSE by 0.5%, Homebuilding is now 5.9% ABOVE its year ago level.

Nonresidential Construction was UNCHANGED. Nonresidential construction growth is now 8.9% ABOVE its year ago level.

Public Construction FELL by 5.0%, and is now 9.0% BELOW its year ago level.