Construction Spending Accelerates

Construction spending rose more than expected in November. Revisions add to the gains.

Here are some highlights from the Census Bureau's Monthly Construction Spending Report for November 2017.

Total Construction

Construction spending during November 2017 was estimated at a seasonally adjusted annual rate of $1,257.0 billion, 0.8 percent above the revised October estimate of $1,247.1 billion. The November figure is 2.4 percent above the November 2016 estimate of $1,227.0 billion. During the first eleven months of this year, construction spending amounted to $1,138.3 billion, 4.2 percent above the $1,091.9 billion for the same period in 2016.

Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $964.3 billion, 1.0 percent above the revised October estimate of $955.1 billion. Residential construction was at a seasonally adjusted annual rate of $530.8 billion in November, 1.0 percent above the revised October estimate of $525.3 billion. Nonresidential construction was at a seasonally adjusted annual rate of $433.5 billion in November, 0.9 percent above the revised October estimate of $429.7 billion.

Public Construction

In November, the estimated seasonally adjusted annual rate of public construction spending was $292.7 billion, 0.2 percent above the revised October estimate of $292.0 billion. Educational construction was at a seasonally adjusted annual rate of $78.8 billion, 3.8 percent above the revised October estimate of $75.9 billion. Highway construction was at a seasonally adjusted annual rate of $88.0 billion, 0.8 percent below the revised October estimate of $88.7 billion.

Revisions

The increase in October from September is now reported as +0.9% instead +1.4% as reported last month. However, there were upward revisions in both months so the apparent 0.5 percentage point drop is really an overall gain.

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• August numbers were revised upward in October.
• September numbers were revised upward in October and again in November.
• October numbers were revised upward in November.

Comments

The construction spending report is the most heavily revised of all the reports. This is despite the fact it is seriously delayed. We are just now getting numbers for November.

These numbers will give a boost to GDP estimates for the fourth quarter. Some but not all of this end-of-year surge is due to hurricanes.