NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate of $533.4 billion in February, a gain of 0.1% from the upwardly revised estimate of January. Over the past 12 months, total private residential construction spending was up 5.5%.

The monthly gains are largely attributed to the large increase in single-family and multifamily construction spending. Single-family construction spending increased 0.9% after advancing at the same margin in January. Spending on multifamily construction was up 1.2% after a decline of 1.7% in the prior month, reaching a $63.8 billion annual pace in February. Remodeling spending declined for the second month in a row, down 1.5% in February. On a year-over-year basis, however, spending on home improvements increased by 1.4%.

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 from 2010 to April 2017, and a steady growth in single-family construction and home improvement spending.

Spending on private nonresidential construction increased 1.5% in February to a seasonally adjusted annual rate of $448.6 billion. The largest contribution to this month-over-month nonresidential spending increase was made by the class of office ($3.9 billion), followed by education ($1.1 billion), and commercial ($1.0 billion).Private nonresidential construction spending was 1.1% higher than a year ago, driven by gains in spending on commercial and transportation.

Tags: construction spending, economics, multifamily, remodeling, single-family