Construction Spending Unexpectedly Weak: Home Repairs Collapse

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