Construction Spending Unexpectedly Weak: Home Repairs Collapse

Economists expected a jump of 0.5% in construction spending. Instead, spending came in at 0.1%.

The Census Bureau's Monthly Construction Spending Report shows February spending rose 0.1%, well under the Econoday 0.5% consensus.

Total Construction: Construction spending during February 2018 was estimated at a seasonally adjusted annual rate of $1,273.1 billion, 0.1 percent (±1.2 percent)* above the revised January estimate of $1,272.2 billion. The February figure is 3.0 percent (±1.5 percent) above the February 2017 estimate of $1,235.7 billion.

Private Construction: Spending on private construction was at a seasonally adjusted annual rate of $982.0 billion, 0.7 percent (±1.6 percent)* above the revised January estimate of $974.8 billion. Residential construction was at a seasonally adjusted annual rate of $533.4 billion in February, 0.1 percent (±1.3 percent)* above the revised January estimate of $532.9 billion. Nonresidential construction was at a seasonally adjusted annual rate of $448.6 billion in February, 1.5 percent (±1.6 percent)* above the revised January estimate of $441.9 billion.

Public Construction: In February, the estimated seasonally adjusted annual rate of public construction spending was $291.1 billion, 2.1 percent (±1.6 percent) below the revised January estimate of $297.4 billion. Educational construction was at a seasonally adjusted annual rate of $74.6 billion, 0.5 percent (±2.6 percent)* below the revised January estimate of $75.0 billion. Highway construction was at a seasonally adjusted annual rate of $88.5 billion, 0.2 percent (±5.4 percent)* below the revised January estimate of $88.7 billion.

Note the variances. The construction report is one of the most heavily modified. The details are interesting.

Construction Spending Details

February Construction Spending Notes

  1. Private spending was 77% of the total
  2. Public spending was 23% of the total.
  3. Private residential was 54% of private spending, 43% of the total.
  4. New single family was 22% of the total.
  5. New single family plus new multifamily is 65% of private residential.
  6. New single family rose 0.9%, new multifamily 1.2% but private residential spending only rose 0.1%

Home Repair Spending Collapsed

Look at points five and six.

Home repair and remodeling spending collapsed. This is either a collapse in hurricane repairs, part of a general collapse in consumer spending, or both.

Mike "Mish" Shedlock

Comments
No. 1-3
Mike Mish Shedlock
Mike Mish Shedlock

Editor

I failed to spot the revision or I would have mentioned it. Econoday which typically crows about everything did not spot it either. Construction revisions are often massive, both directions. If you like equities here, buy them. I was bullish in March of 2009 but did not stay that way long enough for sure.

klausmkl
klausmkl

The last two months were adjusted up. I love how you spin it while other writers say spending increased .01%. You say its weak because it did not meet the estimated .05%. However next month this month can be revised up. are you taking bearish tones like Zero hedge now? Every person who listened to them since the 09 crash has been left in the dust.

thimk
thimk

no more houses to fix and flip

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