Construction Spending: Increases Slightly

February 1, 2016
Bottom Line: Construction rose slightly in December, below expectations. Homebuilding increased modestly but the year-over-year growth is slowing. Non-residential construction year-over-year is rising moderately. Finally, public construction increased and is now modestly above its year ago levels. Overall, construction spending is now growing moderately on a year-over year basis. Construction Spending ROSE by 0.1% in December, compared with market expectations for an increase of 0.6%. The November estimate was revised modestly lower from -0.4% to -0.6%, while the October, estimate was also revised modestly lower from 0.3 to -0.1. Construction spending is now 8.2% ABOVE its year ago level but still 7.3% below its March 2006 peak. Residential Construction ROSE by 0.9%, reflecting the recent gains in housing starts. Homebuilding has been on a improving trend and is now 8.1% ABOVE its year ago level. Nonresidential Construction FELL by 2.1%. Nonresidential construction year-over-year growth is now 11.8% ABOVE its year ago level. Public Construction ROSE by 1.9% and is now 3.9% ABOVE its year ago level. Public construction had been on a declining trend until March 2014 but is now increasing modestly.
Article by contingentmacro