The Census Bureau's Construction Spending Report provides further evidence that first-quarter GDP is off to a very rocky start.

Key Points

  • Total construction spending was flat but the Econoday consensus was for a 0.3% gain.
  • As a small consolation, December was upped 0.1 percentage points.
  • Private construction spending fell 0.5% with nonresidential spending down a whopping 1.5%.
  • Public construction spending, the smallest component, rose 1.8%

Total Construction

Construction spending during January 2018 was estimated at a seasonally adjusted annual rate of $1,262.8 billion, nearly the same as the revised December estimate of $1,262.7 billion. The January figure is 3.2 percent above the January 2017 estimate of $1,223.5 billion.

Private Construction

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Spending on private construction was at a seasonally adjusted annual rate of $962.7 billion, 0.5 percent below the revised December estimate of $967.9 billion. Residential construction was at a seasonally adjusted annual rate of $523.2 billion in January, 0.3 percent above the revised December estimate of $521.8 billion. Nonresidential construction was at a seasonally adjusted annual rate of $439.6 billion in January, 1.5 percent below the revised December estimate of $446.2 billion.

Public Construction

In January, the estimated seasonally adjusted annual rate of public construction spending was $300.1 billion, 1.8 percent above the revised December estimate of $294.8 billion. Educational construction was at a seasonally adjusted annual rate of $76.7 billion, 2.1 percent above the revised December estimate of $75.2 billion. Highway construction was at a seasonally adjusted annual rate of $92.6 billion, 4.4 percent above the revised December estimate of $88.8 billion.

Awful Year-Over-Year Numbers

  • Manufacturing: -9.7%
  • Power: -8.7%
  • Multi-Family: -3.4%
  • Non-Residential: -1.1%

Construction spending is one of the most heavily revised reports but if these numbers stick, it's further indication of a very weak first quarter.

Mike "Mish" Shedlock

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