Construction Spending: Improvement Spending Shows Strength

After recent positive data revisions, seasonally adjusted improvement spending has shown growth during the spring of 2013.  The current pace of improvement spending is the highest since 2007. This improved picture of the remodeling market is consistent with NAHB surveys of remodelers, suggesting improving market conditions during the second quarter

According to the current Census construction spending report, total private residential construction spending was effectively unchanged at a seasonally adjusted annual rate of $332.1 billion in June 2013. The May rate of $332.2 billion was the fastest pace since September 2008. The current reading is 18.1% higher than a year ago.

Single-family spending registered a slight decline (0.8%) for the month, while the more volatile multifamily category was down 3.3% in June.

constr spending_8_13

The Census data concerning home improvement spending has changed markedly over the past few months. Post-revisions, on a 3-month moving average basis, the improvement category experienced weakness during the second half of 2012. In contrast, over the course of 2013 remodeling related spending is up 16.2%.

This is a significant reversal with respect to initial reporting, which had just the opposite narrative: weakness during 2013 and strength at the end of 2012.

Taken together, the data illustrate the degree to which residential construction activity is growing off cycle lows. Since market low points, total private residential construction spending is up 45.3%, single-family 80.8%, multifamily 136.9%, and improvement-related spending 30.7%.

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14 Responses to Construction Spending: Improvement Spending Shows Strength

  1. […] the highest total since May 2008. While the increase in unfilled positions is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rising count of open […]

  2. […] the highest total since May 2008. While the increase in unfilled positions is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rising count of open […]

  3. […] the highest total since May 2008. While the increase in unfilled positions is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rising count of open […]

  4. […] establishment births and decreases in establishment deaths. The upticks in builder confidence and construction activity suggest that this positive turnaround will likely […]

  5. […] establishment births and decreases in establishment deaths. The upticks in builder confidence and construction activity suggest that this positive turnaround will likely […]

  6. […] category experienced weakness during the second half of 2012. But recent trends are positive, with remodeling-related spending up 16.2% over the course of 2013. Improvement-related spending is up 30.7% from post-Great Recession cycle […]

  7. It’s great to see that construction spending is improving and continues to move upward. It’s one of the possible signs that the economy is improving, and that helps everybody, not only the construction industry.

  8. […] government employment data. While the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rise in the count of […]

  9. […] employment data. While the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rise in the count of […]

  10. […] government employment data. While the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rise in the count of […]

  11. […] the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data continue to reflect only modest increases in total employment thus far. The rise in […]

  12. […] the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data continue to reflect only modest increases in total employment thus far. The rise in […]

  13. […] the increase of unfilled positions in 2013 is consistent with the uptick in construction sector activity, particularly for home building, the data continue to reflect only modest increases in total employment thus far. The rise in […]

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