Monday, June 3, 2024
HomeMacroeconomicsPrivate Residential Construction Spending Edges Up in April

Private Residential Construction Spending Edges Up in April

Private residential construction spending rose 0.1% in April, following a 0.4% decline in March. The seasonally adjusted annual pace reached $890.4 billion. Total private residential construction spending is 8% higher compared to a year ago.  

This monthly increase in total construction spending is attributed to more single-family construction and improvements. Spending on single-family construction inched up 0.1% in April, the twelfth consecutive month of increases. Compared to a year ago, spending on single-family construction was 20.4% higher.  

Private residential improvement spending increased 0.3% in April, but it was 3.5% lower compared to a year ago. Multifamily construction spending declined 0.3% in April after a dip of 0.2% in the prior month. However, spending on multifamily construction was 2.3% higher than a year ago, as a large stock of multifamily housing is under construction. Nonetheless, multifamily construction spending will decline in the quarters ahead after an elevated level of apartments under construction is completed.  

The NAHB construction spending index is shown in the graph below (the base is March 2000). The index illustrates how spending on single-family construction experienced solid growth since May 2023 under the pressure of supply-chain issues and elevated interest rates. Multifamily construction spending has slowed since late 2023, while improvement spending pace has decreased since mid-2022.  

Spending on private nonresidential construction was up 8.3% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending for the class of manufacturing ($33.2 billion), followed by the power category ($0.8 billion).

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