The Census Bureau announced today that construction spending was up in March, rising 1.4% to a seasonally adjusted annual rate of $768.9 billion. But for new-home builders, those numbers sound far more optimistic than what the new-home industry saw.
While the private residential construction sector saw an improvement of 2.6% from the previous month (down 8.1% year-over-year), that gain was driven entirely by residential improvements. New single-family home construction fell 1.0% for the month and was down 9.4% on an annual basis. Multifamily new-home construction also dropped, falling 2.2% from February and 13.2% from the previous year.
Residential improvement numbers are so poorly estimated, Patrick Newport, U.S. economist at IHS Global Insight, recommended subtracting them entirely, in a press release about the numbers today. Such a subtraction would bring the overall improvement in construction spending down to a 0.5% increase.
Going forward, Newport foresees spending improvements in the new multifamily housing sector, based on increases in starts and permits. Single-family starts and permits, however, "are still stuck near the bottom,” Newport wrote. “But we are expecting better numbers in the coming months as the economy continues to add jobs.”
Claire Easley is senior editor, online, at Builder.
Learn more about markets featured in this article: Greenville, SC.