econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 01 June 2016

April 2016 Construction Spending Growth Rate Declined.

Written by Steven Hansen

The headlines say construction spending slowed, and was well below expectations. The backward revisions make this series wacky - but the rolling averages declined.

Econintersect analysis:

  • Growth decelertion 6.5 % month-over-month and Up 4.5 % year-over-year.
  • Inflation adjusted construction spending up 2.6 % year-over-year.
  • 3 month rolling average is 8.8 % above the rolling average one year ago, and down 1.6 % month-over-month. As the data is noisy (and has so much backward revision) - the moving averages likely are the best way to view construction spending.

Unadjusted Construction Spending - Three Month Rolling Average Compared to the Rolling Average One Year Ago

US Census Analysis:

  • Down 1.8 % month-over-month and Up 4.5 % year-over-year (versus the reported 8.0 % year-over-year growth last month).
  • Market expected 0.1 % to 0.9 % month-over-month (consensus +0.6) versus the -1.8 % reported

Construction spending (unadjusted data) was declining year-over-year for 48 straight months until November 2011. That was four years of headwinds for GDP.

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 April 2016 was estimated at a seasonally adjusted annual rate of $1,133.9 billion, 1.8 percent (±1.3%) below the revised March estimate of $1,155.1 billion. The April figure is 4.5 percent (±1.6%) above the April 2015 estimate of $1,085.0 billion. During the first 4 months of this year, construction spending amounted to $334.8 billion, 8.7 percent (±1.5%) above the $307.9 billion for the same period in 2015.

PRIVATE CONSTRUCTION - Spending on private construction was at a seasonally adjusted annual rate of $843.1 billion, 1.5 percent (±0.8%) below the revised March estimate of $855.9 billion. Residential construction was at a seasonally adjusted annual rate of $439.7 billion in April, 1.5 percent (±1.3%) below the revised March estimate of $446.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $403.5 billion in April, 1.5 percent (±0.8%) below the revised March estimate of $409.6 billion.

PUBLIC CONSTRUCTION - In April, the estimated seasonally adjusted annual rate of public construction spending was $290.8 billion, 2.8 percent (±2.5%) below the revised March estimate of $299.2 billion. Educational construction was at a seasonally adjusted annual rate of $70.0 billion, 2.5 percent (±3.9%)* below the revised March estimate of $71.8 billion. Highway construction was at a seasonally adjusted annual rate of $89.4 billion, 6.6 percent (±7.2%)* below the revised March estimate of $95.7 billion.

Unadjusted Total Construction Spending Year-Over-Year (blue line) and Month-over-Month (red line) Change

Unadjusted Total Construction Spending Year-Over-Year (blue line) Since 1993

Unadjusted Private Construction Spending Year-Over-Year (blue line) and Month-over-Month (red line) Change

Unadjusted Public Construction Spending Year-Over-Year (blue line) and Month-over-Month (red line) Change

Private construction had been fueling construction growth.

Caveats on the Use of Construction Spending Data

Although the data in this series is revised for several months after issuing, the revision is generally minor. This series is produced by sampling - and the methodology varies by sector being sampled.

The headline data is seasonally adjusted. Econintersect uses the raw unadjusted data.Econintersect determines the month-over-month change by subtracting the current month's year-over-year change from the previous month's year-over-year change. This is the best of the bad options available to determine month-over-month trends - as the preferred methodology would be to use multi-year data (but the New Normal effects and the Great Recession distort historical data).

The data set for construction spending is not inflation adjusted. Econintersect adjusts using the BLS Producers Price Index - subindex New Construction (PCUBNEW-BNEW). However in the inflation adjusted graph in this post, FRED does not have this series - andEconintersect has used Producer Price Index: Finished Goods Less Energy (PPIFLE), Monthly, Seasonally Adjusted which has similar characteristics.

Construction (which historically is an major economic driver) is a literal shadow of its former self. Its contribution to GDP is down $400 billion from its peak level in 2006. The main driver of construction spending is the private sector. Here is the historical breakdown. The graph below uses US Census seasonally adjusted data.

Obvious from the above graph that public spending on construction is falling off, while private spending is slightly trending up. The overall effect is that construction spending is near the same place it was in early 2010.



>>>>> Scroll down to view and make comments <<<<<<



Permanent link to most recent post on this topic

Click here for Historical Releases Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.







Econintersect Economic Releases


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Theory of the Monetary Circuit: A Critique
The Expected Effects of Petitions to Improve the Monetary System
News Blog
August 2016 Median Household Income Has Declined From The Beginning Of The Year
August 2016 Pending Home Sales Index Declines?
24 September 2016 Initial Unemployment Claims: Rolling Averages Continue to Improve.
Third Estimate 2Q2016 GDP Revised Upward. Corporate Profits Down.
The Terrorist Networks At Our Fingertips
Infographic Of The Day: Dubai Interesting Statistics And Facts
Early Headlines: Asia Stocks Up, Oil Surges, OPEC Cuts Production, Student Loan Woes Mount, Trump Still Close, Aleppo Hospitals Bombed, Huge Wind Storm In Oz And More
The World's Most Sustainable Cities
Big Sam In Bad Company
Other Ways To Spend Your AirPod Budget
Crashing Space Station Shows Why China Must Start To Collaborate In Orbit
NFL Edges Towards A Full House In London
What We Read Today 28 September 2016
Investing Blog
Will Deutsche Bank Survive?
Banks Of Absurdity
Opinion Blog
The Federal Reserve Note
Trump, Trade And Taxes
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
29Sep2016 Pre-Market Commentary: US Markets Expected To Open Lower, GDP Higher, Unemployment Lower, US Dollar Higher, Crude Prices Steady And Higher
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved