Residential Spending has Bad Month; Holds up Well Overall

News

Construction spending was essentially flat in May when
compared to April.  The U.S. Census
Bureau said on Monday that there were seasonally adjusted annualized expenditures
of $1.23 trillion during the month on all types of construction.  The revised estimate for April was $1.23
billion as well, but that resulted from a revision of the original sharp decline
in spending reported for March, 1.4 percent, to -0.7 percent.  On a year-over-year basis total spending was
up 4.5 percent.

Analysts polled by Econoday had expected an increase
of 0.5 percent.  Estimates from no change
to a positive 0.9 percent.

On a non-seasonally adjusted basis, total spending in
May was $103.16 billion compared to $99.506 in April. For the first five months
of 2017 the Bureau estimates spending at $469.2 billion, up 6.1 percent from expenditures
at the same point in 2016.

Private spending overall was at a seasonally adjusted
annual rate of $943.2 billion, a -0.6 percent change from April’s estimate of
$949.3 billion, but up 6.2 percent compared to the previous May.  On a non-adjusted basis, private spending
totaled $80.87 billion compared to $78.20 billion in April.  Year to date spending is 9.0 percent higher
than a year earlier.

Private spending on residential construction fared little
better than the overall numbers in May. 
On a seasonally adjusted basis, expenditures were $509.62 billion, a
decrease of 0.6 percent month-over-month from $512.34 billion.  Spending was substantially higher than last
May, an increase of 11.2 percent. Most of the monthly decline was attributed to
multi-family construction which fell by 3.3 percent (but remained 3.0 percent
higher than in May 2016) while single-family construction fell by 0.3
percent.  It too remained strong compared
to last year, up 7.9 percent.

Unadjusted residential spending totaled $44.28 billion
during the month and is at $195.17 billion for the first five months of the
year. In April, $42.77 billion was spent and the year-to-date number is 1.2
percent higher than last year.

Unadjusted spending on single family construction was
$22.16 billion in May and on multi-family it was $5.2 billion.  The figures year-to-date for the two sectors were
$98.30 billion and $25.69 billion, increases of 7.3 percent and 6.2 percent
respectively from their numbers in 2016.

The seasonally adjusted rate of public sector spending
was $286.90 billion in May, an increase of 2.1 percent from April but down 0.6
percent from May 2016.  Residential
spending was at a rate of $6.26 billion, up 9.2 percent for the months but off
by 7.2 percent on an annual basis.

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