Construction One Step Closer to Resolving Supply Issues

After experiencing the largest decline in three months and raising unexpected concerns among market watchers in the industry, U.S. construction spending bounced back in March, the U.S. Census Bureau of the Department of Commerce announced Monday.

According to the data, construction spending for March was estimated at a seasonally adjusted annual rate of $1,137.5 billion, 0.3 percent higher than February’s estimate of $1,133.6 billion. Year-over-year, construction spending was up 8.0 percent from the March 2015 estimate of $1,052.9 billion.

Construction spending totaled $240.4 billion for the first 3 months of this year, up 9.1 percent from the $220.3 billion reported for the same period in 2015.

In February, construction spending was estimated at a seasonally adjusted annual rate of $1,144.0 billion for February 2016, down 0.5 percent from January. Spending in January rose 2.1 percent to a revised estimate of $1,150.1 billion. However, on the positive side, February’s estimated figure is 10.3 percent above last February’s estimate of $1,037.5 billion. During the first 2 months of this year, the Bureau reported that construction spending amounted to $157.1 billion, 11.2 percent above the $141.3 billion for the same period in 2015.

In terms of private construction, the Bureau reported spending rose 1.1 percent month-over-month from $832.8 billion in February to a seasonally adjusted annual rate of $842.3 billion in March.

Residential construction was at a seasonally adjusted annual rate of $435.5 billion in March, 1.6 percent above the revised February estimate of $428.8 billion. Meanwhile, nonresidential construction rose 0.7 percent to a seasonally adjusted annual rate of $406.8 billion in March.

The National Association of Home Builders (NAHB) reported Monday that it “anticipates accelerating growth for single-family spending in 2016.”

According to the Census Bureau, public construction spending was at an estimated seasonally adjusted annual rate of $295.2 billion, 1.9 percent below the revised February estimate of $300.8 billion. Educational construction was at a seasonally adjusted annual rate of $69.6 billion, 0.4 percent above the revised February estimate of $69.4 billion. In addition, highway construction rose 0.4 percent to a seasonally adjusted annual rate of $97.3 billion in March.

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