U.S. Construction Spending Declines for Second Straight Month in May

The seasonally adjusted annual rate of construction spending fell again in May for the second straight month to $1,143.3 billion. April’s estimated $1,133.9 billion was revised up to $1,152.4 billion. March’s estimate was also revised up again from $1,155.1 billion to $1,176.4 billion. May’s estimate is up 2.8% from a year ago, despite the 0.8% drop from April. (Note: The U.S. Census Bureau has made normal revisions to their seasonally adjusted and unadjusted estimates going back to January 2014 in their latest release.)

During the first five months of 2016, construction spending totaled $438.5 billion. This is 8.2% higher than the same period in 2015 when spending totaled $405.4 billion.

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The seasonally adjusted rate for private construction spending also dropped for the second month in a row. May’s rate of $859.3 billion is 0.3 lower than April’s revised estimate of $861.9, which has been revised up from $843.1 billion. This is 1.5% lower than March’s estimate which was revised up again from $855.9 billion to $879.0 billion.

Total private construction spending is up 4.7% from a year ago. Private nonresidential spending was down 0.7% from the previous month to $407.4 billion. Residential construction spending saw little change from April. Single-family construction was down 1.3%, but multi-family construction was up 1.8% for the month to $61.4 billion. This is a 23.9% increase from May 2015 for multi-family construction spending.

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The seasonally adjusted annual rate of public construction spending fell for the third consecutive month. It was down 2.3% to $284.0 billion in May from April’s revised $290.5 billion which was up from the preliminary estimate of $290.8 billion. March’s estimate was revised down from $299.2 billion to $297.4 billion. Public construction spending is down 2.6% from May 2015. Public Commercial construction spending is up 46.4% on the year while Office is down 11.3% since May 2015 and Power is down 11.1%.

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