Residential Construction Spending Lags Despite Big Gains Overall

Publicly funded construction accounted for most of the gain in overall construction spending in January.  The Census Department said on Tuesday that spending on all construction was at a seasonally adjusted annual rate of $1.14 trillion during the month, an increase of 1.5 percent over December spending.  Spending in the public sector rose 4.5 percent driven by a large gain in the highway and street category.

Total spending rose 10.4 percent above the January 2015 figure of $1.03 trillion.  On an unadjusted basis $77.59 billion in construction spending was put in place during the month, down from unadjusted spending of $86.53 billion in December but 9.5 percent more than was spent in January 2015.

Private sector spending was at a seasonally adjusted annual rate of $831.41 billion, a 0.5 percent change from December and up 9.5 percent from a year earlier.  Residential spending was unchanged on a month-over-month basis from the annual rate of $433.16 billion estimated in December but did rise 7.7 percent from a year earlier.  Spending on single-family construction fell by 0.2 percent from December to $230.05 on an annual basis, remaining 6.6 percent higher than in January 2015.  Spending on new multi-family construction rose 2.6 percent from December and was 30.4 percent above the level a year before.

On a non-adjusted basis $29.13 billion was spent on new residential construction compared to $31.91 billion in December and $26.96 billion in January 2015.  Single family construction was down from 17.14 billion unadjusted in December to 15.94 billion while multi-family spending was essentially unchanged at $4.54 billion.

Total spending on construction in the public sector was at a seasonally adjusted annual rate of $309.47 billion compared to $296.15 billion in December and it increased 13.0 percent year-over-year.  Spending on residential construction was $5.79 billion, down 1.9 percent from December and 1.7 percent from January 2015.  Spending was strongest in the highway construction sector, up 14.7 percent on a monthly basis and by just over a third year over year.