By Manuel Gutierrez, Consulting Economist to NKBA
Spending on all types of construction projects, both residential and nonresidential, rose by 0.3 percent in March to an annual rate of $1.8 trillion. Following the pattern seen over the previous twelve months of nonresidential spending rising and residential spending falling, nonresidential rose by 0.7 percent to $997 billion, while residential fell by 0.2 percent to $838 billion.
- Spending on residential projects — which include both new housing and homeowner remodeling — reached a peak of $945 billion in May of last year. Since then, it has fallen by 12.4 percent. This spending accounted for 45.7 percent of the entire construction market, with nearly all residential spending dollars attributed to private projects, making up $828 billion out of the total $838 billion. Within the private sector, residential represented 58 percent of the total.
- In March, spending on single family housing, the largest of the three residential components, was down by 0.8 percent to $366 billion. This was the eleventh consecutive monthly decline. Year over year, single family housing was down by 22.9 percent. Single family housing construction represented 44 percent of the residential market.
- Multifamily housing spending rose in March by 0.4 percent to $123 billion. This was the smallest increase since July of last year. Multifamily spending accounted for 15 percent of the residential construction market.
- Spending on remodeling projects by homeowners rose by 0.3 percent in March to $338 billion. Despite this increase, spending was 2.0 percent lower than in the previous year. Remodeling constituted 41 percent of the residential construction market.
- Outside of residential construction spending, the nonresidential construction spending category of lodging projects also impacts our members directly. Lodging facilities — such as hotels, motels, casino-hotels and the like — involve a more intensive use of K&B products and services. In March, construction spending on such facilities was flat at $22 billion. Nonetheless, spending was 38.9 percent higher than in the previous year.
