May 2011 Construction Spending Broke Negative Trend

Although the headlines for May 2011 construction spending show a 0.6% decline, Econintersect believes construction spending improved month-over-month.  Prior to May, construction spending was in a two month downtrend of year-over-year data.

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during May 2011 was estimated at a seasonally adjusted annual rate of $753.5 billion, 0.6 percent (±1.6%)* below the revised April estimate of $757.9 billion.

The May figure is 7.1 percent (±1.8%) below the May 2010 estimate of $811.2 billion.  During the first 5 months of this year, construction spending amounted to $285.1 billion, 6.3 percent (±1.4%) below the $304.4 billion for the same period in 2010.

PRIVATE CONSTRUCTION:  Spending on private construction was at a seasonally adjusted annual rate of $477.2 billion, 0.4 percent (±1.4%)* below the revised April estimate of $479.3 billion. Residential construction was at a seasonally adjusted annual rate of $228.9 billion in May, 2.1 percent (±1.3%) below the revised April estimate of $233.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $248.3 billion in May, 1.2 percent (±1.4%)* above the revised April estimate of $245.4 billion.

PUBLIC CONSTRUCTION:  In May, the estimated seasonally adjusted annual rate of public construction spending was $276.3 billion, 0.8 percent (±2.2%)* below the revised April estimate of $278.6 billion. Educational construction was at a seasonally adjusted annual rate of $68.6 billion, 2.3 percent (±3.0%)* below the revised April estimate of $70.2 billion. Highway construction was at a seasonally adjusted annual rate of $74.7 billion, 1.5 percent (±7.5%)* below the revised April estimate of $75.9 billion.

The last 3 years of this data series was revised this month so the year-over-year change is very different optically.  You can view last month’s data here.

Still, construction spending so far in 2011 is in an overall downtrend with private spending down 6.8% year-to-date while public spending is down 5.5% year-to-date.

Construction is not an economic driver in the new normal.  The slight improvement in year-over-year data is an interesting event in the middle of an economic soft spot.

Related Articles:

All Construction Spending Articles

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