Construction Spending: Sharply Higher With Positive Revisions

April 1, 2019
Bottom Line: Construction spending was sharply stronger than expected in February and there were revisions to January and December data showing much stronger gains than previously reported. While this series is often volatile and subject to heavy revisions, the longer-term trend looks to be improving modestly. The last three months showed annualized growth of 15.7% after 2018's paltry gain of just 0.3%. Improvement was seen across sectors with residential, commercial and public construction leading the way. Overall, while the pace of the last year was still near cycle lows there were signs of stabilization and even modestly higher growth in construction over the last few months. Construction Spending ROSE by 0.99% in February, compared with market expectations for a decrease of -0.2%. The January estimate was revised moderately higher from 1.31% to 2.46%, while the December estimate was revised moderately higher from -0.8% to 0.2%. Construction spending is now 1.1% ABOVE its year ago level. Residential Construction ROSE by 0.7%, Homebuilding is now 3.4% BELOW its year ago level. Nonresidential Construction FELL by 0.5%. Nonresidential construction growth is now 0.1% ABOVE its year ago level. Public Construction ROSE by 3.6%, and is now 11.5% ABOVE its year ago level.