It is the best of times and the worst of times for the building business in the United States.
But it is not exactly a tale of two cities. It’s more a tale of cities, commercial construction, and government building, on the one hand, and private suburban houses, on the other.
Private sector spending on the construction of single-family homes rose 2 percent on in March to a seasonally adjusted annualized rate of $389.9 million, the eight consecutive monthly increase, data from the Commerce Department showed Monday. Compared with a year ago, single-family home construction spending is up 26.7 percent.
That annual gain is not boosted significantly due to the pandemic, which did not hit the housing numbers until April. In fact, we’re above the recent pre-pandemic peak of $307.2 million reached in February of 2012. In future months, however, the so-called “base effect”—measuring current numbers off of pandemic shutdown induced lows—will push year over year gains to extremely high levels.
Construction spending on private sector multifamily residences, apartments and condominiums, fell 0.2 percent, the second straight monthly decline, to a seasonally adjusted annualized rate of $93.5 million. Public sector residential construction spending, a tiny part of the market, declined 1.5 percent to a seasonally adjusted rate of $9.2 million.
Overall residential construction spending rose 1.7 percent in March, up from the slight 0.1 percent increase in February. The prior month’s figure was likely held down by extreme weather in much of the country.
Spending on constructing hotels and motels, offices, manufacturing facilities, and commercial spaces fell. Spending on transportation was flat for the month.
Spending on public construction projects dropped 1.5 percent in March after falling 1.6 percent in February. Compared with a year ago, it is down 4.6 percent. Public spending on highways fell 2.2 percent and is down 10.9 percent compared with a year ago.
Aggregate all the various categories of construction spending together and you get a rise of 0.2 percent for March. That’s better than the 0.6 percent drop in February but below the 2 percent gain expected.