Briefing.com: Construction Spending

Updated: 01-Jun-17 10:41 ET

April Construction Spending

Updated: 01-Jun-17 10:41 ET

Highlights

The Construction Spending Report for April produced a big headline disappointment, as total spending declined 1.4% (Briefing.com consensus +0.5%) month-over-month. The mitigating factor, however, came in the understanding that March construction spending was revised to show a 1.1% increase versus an originally reported decline of 0.2%.

Key Factors

Total private construction spending declined 0.7% in April, with private residential spending down 0.7% and private nonresidential spending down 0.6%. A 1.9% decline in manufacturing spending and a 1.4% decline in power spending led the downturn in nonresidential spending.
Despite the April decline, private construction spending was up 10.4% year-over-year.
Total public construction spending declined 3.7% in April, with nonresidential spending down 3.4%. Residential spending, which accounts for roughly 2% of total public construction spending, was down 15.5%. Highway and street spending, the biggest chunk of public construction spending, fell 3.7% in April.
On a year-over-year basis, public construction spending was down 4.4%.
Residential spending in aggregate was down 0.9% in April while nonresidential spending was down 1.7%. On a year-over-year basis, total construction spending was up 6.7%.

Big Picture

The key takeaway from the report is that it will curtail some of the second quarter GDP growth estimates since spending in April was roughly in-line with the first quarter average.