By Peter Ricci
Residential construction spending increased modestly in September, rising 2.8 percent from August’s revised totals to an annual rate of $285.9 billion, according to the latest numbers from the Census Bureau.
After four years of precipitous declines, residential construction has rebounded to a noticeable degree in 2012, and it now up 21 percent from 2011.
Census Bureau – Construction Spending Stats
In addition to the increases in residential construction spending, the Census Bureau reported other promising stats for the construction industry, including:
- Overall construction spending rose 0.6 percent from August to September to an annual rate of $846.2 billion, which is 7.8 percent above September 2011.
- For the first nine months of 2011, construction spending is 8.9 percent above the same period in 2011.
- For private construction, spending increased 1.3 percent from August to September, with nonresidential construction relatively flat between the months.
- Public construction spending was a bit more modest by comparison, which has been the trend in recent months; overall, public construction was down 0.8 percent in September, with educational construction down by 0.8 percent and highway construction by 1.6 percent.
Residential Construction Spending – Industry in Recovery
We’ve reported before on the importance of looking at the residential construction market with a wide-angle lens. Though a 2.8 percent monthly increase will not exactly set the world on fire, residential construction had traveled considerable lengths since bottoming in early 2009.
As Bill McBride reported on his Calculated Risk blog, residential construction spending is now 29 percent above that post-bubble low, as is non-residential spending.
And if the most recent projections for residential construction are any indicator, we can expect this positive trend to continue in 2013. The multifamily housing sector, as the Architecture Billings Index reported, is hot as ever, and the National Association of Home Builders released a positive look at housing construction in 2013.