NAHB analysis of Census Construction Spending data shows that total private residential construction spending remained virtually unchanged in May at a seasonally adjusted annual rate of $451.9 billion. Private nonresidential construction spending fell for a second consecutive month in May.
Within private residential construction, spending on single-family dropped to $239.2 billion in April, down 1.3% over the upwardly revised April estimate. Despite this monthly decrease, single-family spending was 6.3% higher than a year ago. Both multifamily and improvement spending registered gains in May. Multifamily spending increased to $61.4 billion, up by 1.8% since April and 23.9% year over year. Private construction spending on home improvements rose to a seasonally adjusted annual rate of $151.2 billion in May, up by 1.4% since last month.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the strong growth in new multifamily construction since 2010, while new single-family construction and home improvements spending have drifted upward at a more modest pace. NAHB anticipates accelerating growth for new single-family spending over the rest of 2016.
The pace of private nonresidential construction spending fell 0.7% on a monthly basis, but was 3.9% higher than the May 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (22.5% increase), followed by lodging (20.6% increase) and amusement and recreation religious (20.1% increase).