A marked increase on home improvement expenditure provided a notable rise in private residential construction spending in March, but spending on single-family and multifamily housing construction continued to decline. The Construction Spending report from the Bureau of Census indicated a 3.1% increase in private residential construction spending to $232.1 billion from a downwardly revised $225.07 billion March (March private residential construction spending was previously reported as $229.1 billion).
Home improvement spending was the sole contributor to the rise in private residential construction spending during April, with single family construction spending down 1.0% to $104.7 billion and multifamily construction spending down 0.1% to $12.8 billion. Both the single family and multifamily construction spending have been declining steadily since the beginning of the year, falling 3.2% and 3.5%, respectively, since January.
The gain in home improvement spending was more the result of a significant downward revision to the previous month, rather than a healthy improvement in spending. Home improvement spending was up 7.6% to $114.6 billion, but over half of the gain (4.2%) was due to a downward revision to the March number (March home improvement spending was revised down to $106.5 billion from $110.7 billion last month). Home improvement spending is typically very volatile and subject to regular revisions. Thus, further revisions to the April reading on home improvement spending are likely.
Total private construction spending was up 1.7% to $483.0 billion. The increase in private residential construction spending supported by a 0.5% increase in private non-residential construction spending to $250.8 billion. The improvement, led by in a rise communication (+4.7%), educational (+3.9%), power (+3.2%), and amusement and recreation (+2.7%) expenditures, but offset by declines in transportation (-7.0%), lodging (-4.4%), office (-3.2%), and religious buildings (-2.9%).
Government expenditures continued to decline in March, down 1.9%, with notable decreases in spending on amusement and recreation (-6.8%), transportation (-3.8%), educational (-2.7%) and sewage and waste disposal (-2.5%). This was only partially offset by a rise in healthcare (+4.4%) and residential (1.6%) expenditures.
Overall, total construction spending was up 0.4% in April, to a seasonally adjusted annual rate (SAAR) of $765.0 billion. This follows a gain of 0.1% in January. However, year-over-year, total construction spending is down 9.3%, from $843.1 billion in April 2010.