The U.S. Census Bureau of the Department of Commerce announced that construction spending during May 2015 was estimated at a seasonally adjusted annual rate of $1,035.8 billion, 0.8 percent (±1.5 percent) above the revised April estimate of $1,027.0 billion. The May figure is 8.2 percent (±2.0 percent) above the May 2014 estimate of $957.6 billion.
During the first five months of this year, construction spending amounted to $382.1 billion, 5.9 percent (±1.5 percent) above the $360.8 billion for the same period in 2014.
In May, the estimated seasonally adjusted annual rate of public construction spending was $283.4 billion, 0.7 percent (±2.5 percent) above the revised April estimate of $281.5 billion. Educational construction was at a seasonally adjusted annual rate of $65.3 billion, 0.7 percent (±3.9 percent) below the revised April estimate of $65.8 billion.
Highway construction was at a seasonally adjusted annual rate of $85.1 billion, 2.1 percent (±6.9 percent) above the revised April estimate of $83.3 billion
- Spending on private construction was at a seasonally adjusted annual rate of $752.4 billion, 0.9 percent (±0.8 percent) above the revised April estimate of $745.6 billion.
- Residential construction was at a seasonally adjusted annual rate of $359.5 billion in May, 0.3 percent (±1.3 percent)* above the revised April estimate of $358.5 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $392.8 billion in May, 1.5 percent (±0.8 percent) above the revised April estimate of $387.1 billion'
"This was another solid report for nonresidential construction," said Patrick Newport and Stephanie Karol, U.S. economists for IHS Global Insight. "Elsewhere, May’s figures were weakly positive. However, revisions to the past two years’ worth of data raised core construction spending considerably. Core spending is made up of four categories: private single-family, private multifamily, private nonresidential, and state and local government spending.
"Revisions to the past two years had a large, positive impact on nonresidential spending, particularly in late 2013 and early 2014," they said. "Single-family residential spending was largely unchanged through mid-2014, but has been revised upwards significantly over the past ten months. Multifamily residential spending was lowered slightly over the entire three-year period. State and local government spending was largely unchanged."
Spending on new residential construction was hampered by a lateral move from the single-family category. While single-family starts performed very well in April, they retreated slightly in May; meanwhile, average prices have retreated m/m in four out of the past five months. This translates into lackluster monthly spending figures. In year on year terms, this category rose by 11.2 percent.
"Private nonresidential construction had another solid month, increasing 1.5 percent," Newport and Karol said. "Compared with a year ago, spending was up 12.7 percent, with 7 of 11 categories – lodging (up 30.4 percent), office (up 26.9 percent), commercial (up 11.3 percent), amusement and recreation (up 46 percent), transportation (up 13.1 percent), communication (up 15.8 percent) and manufacturing (up 70 percent) – posting double-digit year-on-year gains.
"Public construction, which has been zigzagging around a flat line over the past 12 months, zigged up 0.7 percent in May," they concluded. "Compared to a year ago, public construction spending was up 2.8 percent."