The construction spending report for March was a bit of a jolt, especially given the reason for the unexpected decline. Some significant softness in private residential spending drove the Census Bureau's estimated overall spending for the month down 1.7 percent to a seasonally adjusted annual rate of $1.29 trillion compared to a revised February estimate of $1.31 trillion.
Analysts had expected construction spending to increase only slightly, the range among those polled by Econoday was 0.3 to 0.9 percent with a consensus of 0.5 percent. Econoday said that while the March data was a surprise, it was offset by a heavy upward revision to the February numbers, a 1.0 percent increase from January, rather than the 0.1 percent originally reported.
Despite the hit, the March estimate is still 3.6 percent higher than that from March 2017. On an unadjusted basis total spending for the month was $99.33 billion compared to $90,41 billion in February. Total outlay for the first three months of the year is estimated at $264.53 billion, a 5.5 percent increase compared to the same period in 2017.
Private construction numbers were at a seasonally adjusted annual rate of $987.49 billion, a 2.1 percent month-over-month decline, but was still higher than the previous March by 3.9 percent. For the year-to-date at the end of March the private sector has spent $220.39 billion on construction, a 5.1 percent gain from the first three months of 2017.
Private residential construction, which has been a bright spot in earlier reports, was at a seasonally adjusted annual rate of $536.79 billion compared to $556.53 billion in February, a 3.5 percent loss. That number remains 5.3 percent greater than the March 2017 total.
Single-family construction, at a rate of $283.54 billion, was down 0.4 percent from February and multi-family construction fell 2.7 percent. The single-family sector remains 9.7 percent higher on a year-over-year basis, but multifamily is lagging March 2017 by 8.2 percent. Spending on home improvements was also down, by 8.0 percent.
On a non-adjusted basis there was $42.82 billion spent on housing in March, $22.20 billion of it on single-family spending. The respective figures in February were $37.19 billion and $18.96 billion. Year-to-date spending is up 7.8 percent for overall residential spending and 10.5 percent for single family construction. The multifamily part of the industry has fallen 5.1 percent below last year's first quarter total.
Public dollars spent on construction were nearly flat - an annual rate of $297.25 compared to $297.30 in February - but were 3.0 percent higher than in March 2017. First quarter spending increased by 6.7 percent from last year with the big winners being healthcare construction, up 37.3 percent and commercial construction up 26.3 percent. Seasonally adjusted residential spending was down 0.1 percent for the month but was 4.9 percent higher on an annual basis and on an unadjusted basis is running 7.7 percent higher over the first three months of the year.
