The U.S. Census Bureau of the Department of Commerce announced that construction spending during January 2016 was estimated at a seasonally adjusted annual rate of $1,140.8 billion, 1.5 percent (±1.0 percent) above the revised December estimate of $1,123.5 billion. The January figure is 10.4 percent (±1.6 percent) above the January 2015 estimate of $1,033.3 billion.
In January, the estimated seasonally adjusted annual rate of public construction spending was $309.4 billion, 4.5 percent (±1.6 percent) above the revised December estimate of $296.2 billion. Highway construction was at a seasonally adjusted annual rate of $110.4 billion, 14.7 percent (±4.3 percent) above the revised December estimate of $96.2 billion. Educational construction was at a seasonally adjusted annual rate of $68.8 billion, 1.9 percent (±2.8 percent) below the revised December estimate of $70.1 billion.
- Spending on private construction was at a seasonally adjusted annual rate of $831.4 billion, 0.5 percent (±0.8 percent) above the revised December estimate of $827.3 billion.
- Residential construction was at a seasonally adjusted annual rate of $433.2 billion in January, nearly the same as (±1.3 percent) the revised December estimate of $433.1 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $398.2 billion in January, 1.0 percent (±0.8 percent) above the revised December estimate of $394.2 billion.
According to Patrick Newport, U.S. Economist for IHS Global Insight, “The key concept in this report, core construction (single-family, multifamily, state and local government, and private nonresidential construction), started the year with a solid broad-based 1.8 percent monthly gain. Since the initial monthly estimates are based on incomplete sampling and are often sharply revised, we suggest waiting a month before toasting them.
“Single-family construction, which reflects the recent performance of single-family housing starts, was about flat; multifamily construction increased 2.6 percent from December,” Newport said. “The outlook for residential construction this year is for further solid gains driven by a pickup in household formation by young adults.
“Private nonresidential spending increased 1.0 percent – not enough to move the flat trajectory it has been on since last May,” Newport continued. “Private nonresidential construction consists of 11 categories whose recent performance has been mixed – manufacturing, health care and religious are slipping, office, lodging and commercial are climbing (although commercial was down in January) – and the remaining categories moving sideways.
“Spending on highways and streets shot up 14.7 percent to a record high of $110.3 billion (annual rate), accounting for the entire increase in public construction, which was up 4.6 percent for the month and 13 percent from a year earlier,” Newport concluded. “Although it is too soon to tell, there is a good chance that this boost to spending is related to the Fixing America’s Surface Transportation Act (FAST Act).”