NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 0.2% in May to a seasonally adjusted annual rate of $751.7 billion. Total private residential construction spending was 28.7% higher than a year ago.
The monthly gains are attributed to the strong growth of spending on single-family construction. Single-family construction spending rose to a $402.3 billion annual pace in May, up by 0.8% over the April estimates. It increased by 46.1% on a year-over-year basis. This is line with the steady readings of single-family housing starts. Multifamily construction spending was virtually unchanged at a $99.3 billion annual pace in May and was 25.6% higher than a year ago. Spending on improvements dipped by 0.6% in May, after staying flat in April.
The NAHB construction spending index (base is January 2000), which is shown in the graph below, illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown from the second half of 2019.
Private nonresidential construction spending decreased 1.1% to a seasonally adjusted annual rate of $451.6 billion in May. And it was 5.8% lower than a year ago. The largest contribution to this month-over-month nonresidential spending decrease was made by the class of manufacturing ($2.0 billion), followed by power ($1.7 billion), and lodging ($0.7 billion).