Residential construction spending spiked in January, rising 5.1% from December—the largest monthly jump since at least June 2003 (the first month for which Census construction spending data is available), according to data released today by the U.S. Census Bureau.
Private residential construction increased 5.3%, but remained 7.7% below year-ago levels. Single-family gained 0.8% but lost 4.8% from the previous year. Multifamily lost 2.9% from the previous month and declined a whopping 20.1% from January 2010.
To keep things in perspective, some could argue that from December’s annual rate of $242.6 billion, residential construction had nowhere to go but up. January’s number, an annual rate of $255.1 billion, remains 7.0% below January 2010.
And the validity of the Census Bureau’s residential spending numbers is fairly shaky. Even the Census Bureau itself doesn’t itemize these numbers because it doesn’t consider them reliable, explained Patrick Newport, U.S. economist at IHS Global Insight on a call with Builder this morning. “It’s a really difficult thing to pin down,” Newport said. “They send out surveys, but people don’t return the surveys promptly. So the January number isn’t a real number. It’s a forecast. … Even the revised estimate is not good, because the sample is very small and very volatile.”
Overall, construction spending fell 0.7% in January from the month before and dropped 5.9% on an annual basis to $792 billion, the lowest level seen in more than 10 years, a trend Newport attributes to January's bad weather.
Claire Easley is senior editor, online, for Builder.
Learn more about markets featured in this article: Greenville, SC.