January 2016 Construction Spending

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Construction spending during January 2016 was estimated at a seasonally adjusted annual rate (SAAR) of $1,140.8 billion (the highest level since October 2007), 1.5 percent (±1.0%) above the revised December estimate of $1,123.5 billion (originally $1,116.6 billion); that was well above expectations of +0.5% MoM. The January figure is 10.4 percent (±1.6%) above the January 2015 estimate of $1,033.3 billion. The YoY percentage change in the not-seasonally adjusted estimates (shown in the above table) was +9.5%.

PRIVATE CONSTRUCTION

Spending on private construction was at a SAAR of $831.4 billion (highest level since November 2007), 0.5 percent (±0.8%)* above the revised December estimate of $827.3 billion. Residential construction: $433.2 billion, nearly the same as (±1.3%)* the revised December estimate of $433.1 billion. Nonresidential construction: $398.2 billion, 1.0 percent (±0.8%) above the revised December estimate of $394.2 billion.

PUBLIC CONSTRUCTION

Spending on public construction was $309.4 billion (highest level since September 2010), 4.5 percent (±1.6%) above the revised December estimate of $296.2 billion. Educational construction: $68.8 billion, 1.9 percent (±2.8%)* below the revised December estimate of $70.1 billion. Highway construction: $110.4 billion, 14.7 percent (±4.3%) above the revised December estimate of $96.2 billion.

* 90% confidence interval includes zero. The U.S. Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero. 

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Click here for a discussion of January’s new residential permits, starts and completions. Click here for a discussion of new and existing home sales, inventories and prices.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.