Year-Over-Year Construction Spending in November Surges
Total construction spending in November 2016, at $1.182 trillion on a seasonally adjusted annual basis, surged 4.1 percent higher year-over-year, and has climbed 0.9 percent compared to October, the Census Bureau reports.
Overall residential spending is 1.0 percent higher versus October, and has risen 3.0 percent compared to November 2015.
Total nonresidential is up 0.8 percent month-over-month, and is up 4.9 percent year-over-year, with the annual gain in nonresidential driven largely by +28.4 percent in lodging; +27.5 percent in office; +12.4 percent in commercial; and +13.2 percent in amusement-recreation.
Private construction spending is +1.0 percent month-over-month and +4.6 percent year-over-year. Private residential (+1.0 percent) edged higher in November with the help of single-family and home improvement, according to the Wells Fargo Economics Group. Private residential is +3.0 percent compared to November 2015.
"Based on the trend in housing starts, we expect to see continued gains in single-family and moderation in multifamily," said Anika R. Khan, senior economist.
Private nonresidential is +0.9 percent month-over-month, and +4.9 percent from a year earlier, with the largest annual gains in office, +31 percent; lodging, +29.7 percent; and commercial, +12 percent.
"The trend in private nonresidential activity continues to show strong gains in commercial construction, while manufacturing remains weak," Khan said. "Through the first 11 months of 2016, commercial construction climbed 19.1 percent, while manufacturing was down 3.4 percent."
Public construction spending was +0.8 percent versus October, and is +2.6 percent year-over-year. Much of the annual growth in public nonresidential spending is concentrated in highways-streets and education, the two largest sectors, according to Wells Fargo's senior economist. "President-elect Donald Trump augured infrastructure spending, and while we do not expect the package will be as large as initially reported, we expect some pick up in the coming years," Khan said.
New construction data for December 2016 will be released on Feb. 1.