March Gains for Private Residential Spending
NAHB analysis of Census Construction Spending data shows that total private residential construction spending rose 1.7% in March to a seasonally adjusted annual rate of $725.3 billion. Total private residential construction spending was 23.3% higher than a year ago.
The monthly gains are largely attributed to the strong growth of spending on single-family and improvements. Single-family construction spending rose to a $389.9 billion annual pace in March, up by 2%. This is in line with the strong readings of single-family housing starts, despite rising lumber prices. Remodeling spending inched up by 2.0% in March. Meanwhile, multifamily construction spending went down by 0.3% in March, after a dip of 0.9% in February. However, spending on multifamily construction was 14.6% higher since a year ago.
The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy, and the quick rebounds since July 2020. New multifamily construction spending has picked up the pace after a slowdown from the second half of 2019.
Private nonresidential construction spending decreased 0.9% to a seasonally adjusted annual rate of $444 billion. And it was 7.4% lower than a year ago. The largest contribution to this month-over-month nonresidential spending decrease was made by the class of manufacturing ($0.9 billion), followed by transportation ($0.7 billion), and lodging ($0.5 billion).