Construction Spending: Negative Revisions to '18 Data

Bottom Line: Construction spending for January was better than expected but only after sharply negative revisions to the final two months of 2018. Only public sector construction is seeing acceleration (after several years of stagnation) with residential and commercial seeing particularly sharp declines since the 2nd Half of 2018. Construction for manufacturing facilities remains the lone bright spot in the nonresidential sector. Overall, construction spending is now just slightly above its year ago levels, below the pace of 2017 and sharply below that of 2016. Construction Spending ROSE by 1.31% in January, compared with market expectations for an increase of 0.5%. The December estimate was revised modestly lower from -0.60% to -0.79%, while the November estimate was revised moderately lower from 0.8% to -1.3%. Construction spending is now 0.3% ABOVE its year ago level. Residential Construction FELL by 0.3%, Homebuilding is now 5.6% BELOW its year ago level. Nonresidential Construction ROSE by 0.8%. Nonresidential construction growth is now 2.4% ABOVE its year ago level. Public Construction ROSE by 4.9%, and is now 8.0% ABOVE its year ago level.