NAHB analysis of the Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $534.2 billion in June. It was down 1.5% in June, after a 3.6% decline in May and a 4.4% decrease in April, due to the economic consequences of the COVID-19 lockdowns. On a year-over-year basis, total private construction spending dipped 0.8%.
The monthly declines are largely attributed to the slowdown of spending on single-family and improvements. Spending on single-family construction declined 3.6% in June to a seasonally adjusted annual rate of $252.6 billion, after a decrease of 7.7% in May. Private residential improvements, which include spending on remodeling, major replacements, and additions to owner-occupied housing units, dipped 0.4% to a $201.5 billion annual pace in June. Multifamily construction spending rose 3.0% in June, after a slight increase of 0.4% in May, due to prior strength of multifamily starts which is now resulting in properties put into service.
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. New multifamily construction spending has slowed since August 2019, after strong growth from 2010 to 2016 and a surge from late 2018 to early 2019.
Spending on private nonresidential construction declined 3.2% in June on an annual basis to a seasonally adjusted annual rate of $467.7 billion. The annual nonresidential spending decline was mainly due to less spending on the class of manufacturing ($7.3 billion), followed by the category of educational ($5.0 billion), and lodging ($4.9 billion).
—Na Zhao, Senior Economist, NAHB