Construction Spending Rises in November; Significant Improvement Spending Revisions


NAHB analysis of Census construction spending data shows that total private residential construction spending for November increased to a seasonally adjusted annual rate of $428 billion. On a month-over-month basis, private single-family spending was $227 billion, up by 0.6% over the revised October estimate. But private multifamily spending decreased to $57 billion, down by 0.7%.

Annually, the pace of multifamily is up 25% from the October 2014 estimate, and spending on single-family construction was 9% higher.

The NAHB-constructed spending index, which is shown in the graph below (the base is January 2000) indicates those gains. NAHB anticipates accelerating growth for single-family spending in 2015.


The Census Bureau also published a significant revision for the residential improvement spending category. After the revision, the estimate for residential improvement spending was larger, particularly for the 2014 to 2015 period. This places the data series in greater alignment with other measures of the remodeling market, including the NAHB Remodeling Market Index. The change also resulted in an increase in the estimate of total private residential spending. NAHB will publish a more detailed post on these revisions soon.

The pace of total nonresidential construction spending was down by 0.8% on a monthly basis in November, but it posted an annual increase from the revised November 2014 estimate of 10%. The largest contribution to this year-over-year gain was made by the class of manufacturing-related construction (28.8% increase), followed by lodging (28.6% increase) and communication (27.8% increase).


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