The rate of spending on residential construction fell for the 22nd consecutive month in December to the lowest level in almost five years, and spending for the full year in 2007 dropped 18.3 percent compared to 2006, the U.S. Census Bureau reported today.
The seasonally adjusted annual rate of spending on nonpublic residential construction projects slid to about $469.1 billion in December, down 20.4 percent compared to December 2006. It was the lowest level since the May 2003 rate of $456.5 billion and represents a 33.6 percent decline from a peak of $696 billion in February 2006.
The seasonally adjusted annual rate is a projection of a monthly spending total over a 12-month period, adjusted to account for seasonal fluctuations in construction activity.
Total construction spending dropped to a rate of about $1.14 trillion in December, which is down 2.3 percent from December 2006 and is the lowest rate since $1.13 trillion in July 2005. Total construction spending in 2007 was $1.16 trillion, down 2.6 percent from the $1.19 trillion level in 2006.
Spending on all private construction, including residential and nonresidential projects, reached a seasonally adjusted annual rate of about $842.4 billion in August, down 6.1 percent compared to the December 2006 rate. Nonresidential private construction spending reached a rate of $380.4 billion in December, up 20.4 percent compared to the December 2006 rate.
For the full year, private construction spending totaled about $874 billion in 2007, down 6.7 percent compared to spending in 2006.
The seasonally adjusted annual rate of public construction spending was about $297.8 billion in December, up 10.1 percent compared to December 2006. Public construction spending for the full year in 2007 totaled about $287.4 billion, up 12.6 percent compared to spending in 2006, according to the report.
Month-to-month changes in seasonally adjusted statistics often show irregular movements, the Census Bureau noted, and it may take two months to establish a trend for total construction and up to eight months for specific categories of construction. Statistics are estimated from several sources and are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage. Monthly statistics are preliminary estimates that are subject to revision in following months.
January 2008 construction spending data will be released at 10 a.m. EST on March 3.