January 2019 Construction Spending Year-Over-Year Growth Improves But ...

The headlines say construction improved month-over-month. Our analysis shows the rolling averages declined.

Analyst Opinion of Construction Spending

The rolling averages declined - and last month was significantly revised down. This means the headline improvement was caused by reducing the previous month's construction. Also note that inflation is grabbing hold, and not only is the inflation-adjusted numbers are in contraction, but also the year-over-year growth for this month...

The employment gains currently are generally correlating with construction spending.

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Econintersect analysis:

  • Growth accelerated 1,1 % month-over-month and down 0.5 % year-over-year.
  • Inflation-adjusted construction spending down 6.3 % year-over-year.
  • 3 month rolling average is 0.6 % below the rolling average one year ago which decelerated 1.1 % 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.
  • Backward revision for the last 3 months was significantly downward.

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US Census Analysis:

  • Up 1.3 % month-over-month and up 0.3 % (was published 1.6 % last month) year-over-year.
  • Market expected from Econoday -0.4 % to 1.0 % month-over-month (consensus +0.3).

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

This month's headline statement from US Census:

Construction spending during January 2019 was estimated at a seasonally adjusted annual rate of $1,279.6 billion, 1.3 percent (±0.8 percent) above the revised December estimate of $1,263.1 billion. The January figure is 0.3 percent (±1.2 percent)* above the January 2018 estimate of $1,276.3 billion.

PRIVATE CONSTRUCTION - Spending on private construction was at a seasonally adjusted annual rate of $966.0 billion, 0.2 percent (±0.7 percent)* above the revised December estimate of $964.2 billion. Residential construction was at a seasonally adjusted annual rate of $511.4 billion in January, 0.3 percent (±1.3 percent)* below the revised December estimate of $512.9 billion. Nonresidential construction was at a seasonally adjusted annual rate of $454.7 billion in January, 0.8 percent (±0.7 percent) above the revised December estimate of $451.2 billion.

PUBLIC CONSTRUCTION - In January, the estimated seasonally adjusted annual rate of public construction spending was $313.6 billion, 4.9 percent (±1.6 percent) above the revised December estimate of $299.0 billion. Educational construction was at a seasonally adjusted annual rate of $77.8 billion, 2.2 percent (±2.0 percent) above the revised December estimate of $76.1 billion. Highway construction was at a seasonally adjusted annual rate of $99.9 billion, 11.8 percent (±5.1 percent) above the revised December estimate of $89.3 billion.

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