USA Construction Spending Still Falling

Econintersect agrees with the US Census – Construction spending is down in December 2010.   It is down month over month, and year over year whether you use the goverment’s methodology (down 2.5%) or Econintersect’s (down 1.5%).

The data is terrible.  The best performer of this series was public sector construction which was down only 2.7% in 2010 over 2009.   Private sector construction for 2010 was down 14.3% over 2009.  Note that Econintersect only uses unadjusted data so these numbers will vary from the seasonally adjusted numbers used by other sources.

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2010 was estimated at a seasonally adjusted annual rate of $787.9 billion, 2.5 percent (±1.3%) below the revised November estimate of $807.8 billion. The December figure is 6.4 percent (±1.6%) below the December 2009 estimate of $841.8 billion.

The value of construction in 2010 was $814.2 billion, 10.3 percent (±1.0%) below the $907.8 billion spent in 2009.

PRIVATE CONSTRUCTION – Spending on private construction was at a seasonally adjusted annual rate of $486.9 billion, 2.2 percent (±1.1%) below the revised November estimate of $498.0 billion. Residential construction was at a seasonally adjusted annual rate of $226.4 billion in December, 4.1 percent (±1.3%) below the revised November estimate of $236.1 billion. Nonresidential construction was at a seasonally adjusted annual rate of $260.5 billion in December, 0.5 percent (±1.1%)* below the revised November estimate of $261.9 billion.  The value of private construction in 2010 was $507.3 billion, 14.3 percent (±1.0%) below the $592.3 billion spent in 2009. Residential construction in 2010 was $241.4 billion, 1.7 percent (±2.1%)* below the 2009 figure of $245.6 billion and nonresidential construction was $265.9 billion, 23.3 percent (±1.0%) below the $346.7 billion in 2009.

PUBLIC CONSTRUCTION – In December, the estimated seasonally adjusted annual rate of public construction spending was $301.0 billion, 2.8 percent (±1.8%) below the revised November estimate of $309.8 billion. Educational construction was at a seasonally adjusted annual rate of $68.2 billion, 3.7 percent (±2.9%) below the revised November estimate of $70.8 billion. Highway construction was at a seasonally adjusted annual rate of $84.9 billion, 1.6 percent (±4.2%)* below the revised November estimate of $86.3 billion.
The value of public construction in 2010 was $306.8 billion, 2.7 percent (±1.4%) below the $315.5 billion spent in 2009. Educational construction in 2010 was $74.4 billion, 13.6 percent (±2.7%) below the 2009 figure of $86.1 billion and highway construction was $83.3 billion, 1.7 percent (±3.5%)* above the $81.9 billion in 2009.

Going forward, Econintersect is waiting for construction spending to bottom.  The scary part is that we were expecting the private sector to bottom before the cutbacks on the state levels kicked in.  To date, there is no trend lines indicating private sector construction is bottoming.

Construction, unlike other sectors – has a very large multiplier of jobs creation through the economy.  The continuing collapse of construction spending is putting strong headwinds on jobs.

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