NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $500.9 billion in March, the lowest level since December 2016. It was the third consecutive monthly decrease after a rebound in December 2018. The total private residential construction spending was down by 1.8% in March after a 0.4% dip in February and an almost 3.0% decline in January. Year-over-year, it was down 8.4%.
The monthly declines are largely attributed to the slowdown of single-family construction and improvement spending. Spending on single-family construction fell 1.5% in March to a seasonally adjusted annual rate of $263.2 billion, after a decrease of 1.1% in February. This decline mirrors weaker single-family starts in the first quarter of 2019. Home improvement spending slipped 3.1% in March after a modest increase of 0.6% in February. Multifamily construction spending rose 0.7% in March, resuming its steady growth after a dip of 0.1% over the prior 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. Improvement and single-family construction showed weakness over the last year.
Private nonresidential construction spending increased 0.5% on a monthly basis. It was 2.1% higher than a year ago. The largest contribution to this year-over-year nonresidential spending gain was made by the class of manufacturing ($6.9 billion increase), followed by office ($4.7 billion increase), and power ($3.9 billion increase).