Construction Spending for April More than Doubles the Forecast

Men work on a construction site for a luxury apartment complex in downtown Los Angeles, California March 17, 2015. (Photo: Reuters)

The U.S. Commerce Department via the Census Bureau said the construction spending was estimated at a seasonally adjusted annual rate of $1,310.4 billion in April. The 1.8% gain above the revised March estimate of $1,286.8 billion is more than double forecast.

With April, construction spending is 7.6% (±1.5%) higher than the April 2017 estimate of $1,217.7 billion. During the first four months of 2018, construction spending amounted to $387.0 billion, already 6.6% (±1.2%) above the $363.1 billion for the same period in 2017.

Worth noting, the Employment Situation report out earlier this morning showed construction added 25,000 in May, and has added a whopping 286,000 jobs over the past 12 months.

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That followed the ADP National Employment Report released on Wednesday, which showed construction led the way in private sector job creation in the goods-producing sector at a higher 39,000.

Also worth noting, the construction spending report is often very volatile. However, year-on-year readings are very useful for gauging trends.

Private Construction

Spending on private construction was at a seasonally adjusted annual rate of $1,014.3 billion, 2.8% (±0.8%) higher than the revised March estimate of $986.6 billion. Residential construction was at a seasonally adjusted annual rate of $556.3 billion in April, or 4.5% (±1.3%) higher than the revised March estimate of $532.4 billion.

Nonresidential construction was at a seasonally adjusted annual rate of $458.0 billion in April, which is 0.8% (±0.8%)* above the revised March estimate of $454.2 billion.

Public Construction

In April, the estimated seasonally adjusted annual rate of public construction spending was $296.1 billion, 1.3% (±2.0%)* below the revised March estimate of $300.1 billion. Educational construction was at a seasonally adjusted annual rate of $74.2 billion, nearly the same as (±2.3%)* the revised March estimate of $74.2 billion.

Highway construction was at a seasonally adjusted annual rate of $88.0 billion, 1.0% (±6.3%)* below the revised March estimate of $88.8 billion.

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