The headlines say construction spending declined this month – the data is volatile and backward revisions distort the picture. However, the rate of growth looking at the unadjusted rolling averages has been stable. Noteworthy is a continued softness in private sector construction with some strengthening in public sector construction.
The backward revision this month again were generally moderate but upward.
Econintersect analysis:
Unadjusted Construction Spending – Three Month Rolling Average Compared to the Rolling Average One Year Ago
US Census Analysis:
Construction spending (unadjusted data) was declining year-over-year for 48 straight months until November 2011. That was almost four years of headwinds for GDP. Construction spending is now in the sixteenth month of year-over-year spending expansion (unadjusted data), and the average rate of growth over the last 12 months has been approximately 5% – and this month the growth continues below that average.
Indexed and Seasonally Adjusted Total Construction Spending (blue line) and Inflation Adjusted (red line)
This month's headline statement from US Census:
The u.s. Census Bureau of the Department of Commerce announced today that construction spending during November 2014 was estimated at a seasonally adjusted annual rate of $975.0 billion, 0.3 percent (±1.5%)* below the revised October estimate of $977.7 billion. The November figure is 2.4 percent (±1.6%) above the November 2013 estimate of $952.5 billion. During the first 11 months of this year, construction spending amounted to $884.6 billion, 5.7 percent (±1.3%) above the $836.9 billion for the same period in 2013.
PRIVATE CONSTRUCTION – Spending on private construction was at a seasonally adjusted annual rate of $697.7 billion, 0.3 percent (±1.0%)* above the revised October estimate of $695.7 billion. Residential construction was at a seasonally adjusted annual rate of $352.7 billion in November, 0.9 percent (±1.3%)* above the revised October estimate of $349.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $345.0 billion in November, 0.3 percent (±1.0%)* below the revised October estimate of $346.1 billion.
PUBLIC CONSTRUCTION – In November, the estimated seasonally adjusted annual rate of public construction spending was $277.3 billion, 1.7 percent (±2.5%)* below the revised October estimate of $282.0 billion. Educational construction was at a seasonally adjusted annual rate of $62.1 billion, 2.5 percent (±3.1%)* below the revised October estimate of $63.8 billion. Highway construction was at a seasonally adjusted annual rate of $85.7 billion, 0.3 percent (±5.4%)* above the revised October estimate of $85.4 billion.
