Construction Spending Declines 1.7% but Strong Upward Revisions in Jan and Feb

The often volatile and heavily revised construction spending numbers did their thing again in March.

The U.S. Census Bureau announced the following value put in place construction statistics for March 2018:

  • Total Construction: Construction spending during March 2018 was estimated at a seasonally adjusted annual rate of $1,284.7 billion, 1.7 percent (±0.8 percent) below the revised February estimate of $1,306.4 billion. The March figure is 3.6 percent (±1.3 percent) above the March 2017 estimate of $1,239.6 billion. During the first three months of this year, construction spending amounted to $279.0 billion, 5.5 percent (±1.2 percent) above the $264.5 billion for the same period in 2017.
  • Private Construction: Spending on private construction was at a seasonally adjusted annual rate of $987.5 billion, 2.1 percent (±0.8 percent) below the revised February estimate of $1,009.1 billion. Residential construction was at a seasonally adjusted annual rate of $536.8 billion in March, 3.5 percent (±1.3 percent) below the revised February estimate of $556.5 billion. Nonresidential construction was at a seasonally adjusted annual rate of $450.7 billion in March, 0.4 percent (±0.8 percent)* below the revised February estimate of $452.5 billion.
  • Public Construction: In March, the estimated seasonally adjusted annual rate of public construction spending was $297.2 billion, nearly the same as (±1.6 percent)* the revised February estimate of $297.3 billion. Educational construction was at a seasonally adjusted annual rate of $73.1 billion, 0.1 percent (±2.5 percent)* below the revised February estimate of $73.2 billion. Highway construction was at a seasonally adjusted annual rate of $91.0 billion, 1.2 percent (±5.4 percent)* above the revised February estimate of $89.9 billion.

Revisions

  • January as reported in February: +0.0%
  • January as revised in March: +1.6%
  • February as reported in February: +0.1%
  • February as revised in March: +1.0%

Despite the decline in March, these numbers, in isolation, assuming they hold, will add to GDP estimates for the first quarter.

That's a lot of ifs, but that is the nature of these heavily revised numbers.

Mike "Mish" Shedlock

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