Construction spending rose 0.8% in November after downward revisions to October. Solid gains in private sector construction activity offset lackluster performance in the public sector. That trend will likely continue despite talk of an infrastructure bill by the administration in 2018. The administration prefers to target public sector investment to projects that will bring in private sector investors; that means toll roads and bridges
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Construction spending surged 1.4% in October, buoyed by an increase in public sector outlays. Public sector construction spending jumped nearly 4% in October with repairs to public buildings and infrastructure.
Construction spending rose by 0.3% in September after a downward revision to August. Gains in the public sector helped to buoy those gains as crews scrambled to make repairs, most notably in the wake of Hurricane Irma. The increase in public sector spending was on the power grid, transportation and amusement and recreation, which all rose for the month. Contractors came from as far away as Canada to restore power in Florida following the outages created by Irma. Transfers from FEMA helped expedite repairs. The states hit hardest by Irma had the funds to match those dollars.
September housing starts dropped 4.7% to a 1.13 million-unit annualized rate, the lowest level since May. The sharpest drop in single-family starts occurred in the South where hurricanes disrupted construction activity for more than a week in some areas.
Construction spending fell 0.6% in July. Losses were widespread in both the public and private sectors. Public sector construction activity is down on a year-over-year basis but up for the private sector compared to July 2016. One of the few exceptions in the public sector was investment in public safety including correctional facilities, which is not exactly where we would like to see growth in construction.
Construction spending dropped 1.3% in June, adding only 1.6% for the last twelve months after including benchmark revisions that go back three years. The weakness was heavily concentrated in the public sector as Washington has failed to move on a comprehensive infrastructure program. Public sector construction plummeted 5.4% in June, down more than 9% from one year ago. Even highway construction fell 6.6 %, though it has picked up over the last year from anemic levels in 2015.
Construction spending was unchanged in May from April. A sharp drop in private sector construction was only particularly offset by gains in the public sector. Losses for April, however, were not as bad as initially reported.
Losses on the private sector side were broad-based. The downdraft in multifamily construction outpaced the drop in single-family construction.
Construction spending fell 1% in January, well below market expectations, and a surprise given the unusually mild weather across much of the country during the month. The data is seasonally adjusted, which means the mild winter weather should have boosted overall construction activity.
A 5% drop in construction spending in the public sector accounts for the January decline. Spending on state and local projects, which depend heavily on block grants from the federal government, was particularly weak.
Public Sector Declines
Construction spending fell 0.2% in December led by a sharp 2.4% drop in the state and local sectors. The data is slightly better than the headline suggests; state and local construction spending rose at a decent pace during the previous four months. Construction by the federal government jumped during the month but looks small when compared to the sheer size of state and local government spending.
Construction spending jumped 0.9% in November after being revised up slightly for October. Gains were strongest in the private sector. A key exception was multifamily construction, which is now suffering from overbuilding. Lodging and office construction remain among the fastest growing sectors, gaining nearly 30% from one year ago. That, coupled with the sharp increase…