The construction spending report for March was a bit
of a jolt, especially given the reason for the unexpected decline. Some significant softness in private
residential spending drove the Census Bureau’s estimated overall spending for
the month down 1.7 percent to a seasonally adjusted annual rate of $1.29
trillion compared to a revised February estimate of $1.31 trillion.
Analysts had expected construction spending to
increase only slightly, the range among those polled by Econoday was 0.3 to 0.9
percent with a consensus of 0.5 percent.
Econoday said that while the March data was a surprise, it was offset by
a heavy upward revision to the February numbers, a 1.0 percent increase from
January, rather than the 0.1 percent originally reported.
Despite the hit, the March estimate is still 3.6
percent higher than that from March 2017.
On an unadjusted basis total spending for the month was $99.33 billion
compared to $90,41 billion in February. Total outlay for the first three months
of the year is estimated at $264.53 billion, a 5.5 percent increase compared to
the same period in 2017.
Private construction numbers were at a seasonally
adjusted annual rate of $987.49 billion, a 2.1 percent month-over-month decline,
but was still higher than the previous March by 3.9 percent. For the year-to-date at the end of March the
private sector has spent $220.39 billion on construction, a 5.1 percent gain
from the first three months of 2017.
Private residential construction, which has been a
bright spot in earlier reports, was at a seasonally adjusted annual rate of $536.79
billion compared to $556.53 billion in February, a 3.5 percent loss. That number remains 5.3 percent greater than the
March 2017 total.
Single-family construction, at a rate of $283.54
billion, was down 0.4 percent from February and multi-family construction fell
2.7 percent. The single-family sector
remains 9.7 percent higher on a year-over-year basis, but multifamily is
lagging March 2017 by 8.2 percent.
Spending on home improvements was also down, by 8.0 percent.
On a non-adjusted basis there was $42.82 billion spent
on housing in March, $22.20 billion of it on single-family spending. The respective
figures in February were $37.19 billion and $18.96 billion. Year-to-date spending is up 7.8 percent for overall
residential spending and 10.5 percent for single family construction. The multifamily part of the industry has
fallen 5.1 percent below last year’s first quarter total.
Public dollars spent on construction were nearly flat -
an annual rate of $297.25 compared to $297.30 in February – but were 3.0
percent higher than in March 2017. First
quarter spending increased by 6.7 percent from last year with the big winners
being healthcare construction, up 37.3 percent and commercial construction up
26.3 percent. Seasonally adjusted residential
spending was down 0.1 percent for the month but was 4.9 percent higher on an
annual basis and on an unadjusted basis is running 7.7 percent higher over the
first three months of the year.