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Construction Spending decreased 0.3% in May

by Calculated Risk on 7/01/2021 10:35:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during May 2021 was estimated at a seasonally adjusted annual rate of $1,545.3 billion, 0.3 percent below the revised April estimate of $1,549.5 billion. The May figure is 7.5 percent above the May 2020 estimate of $1,437.7 billion.
emphasis added

Private spending increased and public spending decreased:

Spending on private construction was at a seasonally adjusted annual rate of $1,203.3 billion, 0.3 percent below the revised April estimate of $1,206.8 billion. …

In May, the estimated seasonally adjusted annual rate of public construction spending was $342.0 billion, 0.2 percent below the revised April estimate of $342.7 billion.

Construction Spending Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Residential spending is 11% above the bubble peak (in nominal terms – not adjusted for inflation).

Non-residential spending is 9% above the bubble era peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 5% above the previous peak in March 2009, and 30% above the austerity low in February 2014, but weak recently.

Year-over-year Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 28.7%. Non-residential spending is down 5.8% year-over-year. Public spending is down 8.7% year-over-year.

Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but some sectors of non-residential have been under pressure. For example, lodging is down 23.2% YoY, multi-retail down 18.0% YoY, and office down 8.3% YoY.

This was below consensus expectations of a 0.4% increase in spending, however construction spending for the previous months was revised up.

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