The Census Bureau reported that manufacturing construction activity increased an annualized 1.2 percent in November. Manufacturing construction spending rose from $53.93 billion in October at the annual rate to $54.58 billion in November. It has risen for five straight months, increasing from $43.34 billion in June, the lowest point of the year.
Manufacturing construction has averaged $48.97 billion in the first 11 months of 2013. The sector has invested 15.6 percent more on a year-over-year basis, up from $47.23 billion in November 2012. Over a longer time horizon, manufacturers have steadily increased their construction spending dollars after bottoming out in January 2011 at an annualized $28.84 billion pace.
Total construction spending rose by 1.0 percent in November, and it has grown by 5.9 percent year-over-year. The bulk of that growth stemmed from residential construction spending, with the rebound in the housing market helping to propel overall activity higher. Dollars devoted to private, residential construction spending increased 16.6 percent since November 2012, rising 1.9 percent for November 2013 alone.
Private, nonresidential construction has risen more modestly lately, up 2.7 percent in November and just 1.0 percent over the past 12 months. In addition to manufacturing activity, other sectors with higher construction spending for the month included communication (up 11.2 percent), commercial (up 4.7 percent), transportation (up 4.7 percent), office (up 4.6 percent), and power (up 3.3 percent). In contrast, educational institutions (down 3.1 percent) and health care facilities (down 1.2 percent) experienced declines in construction spending.
Meanwhile, public dollars devoted to construction were off 1.8 percent for the month and were down 0.2 percent year-over-year. The November data were mostly lower across-the-board, with the exception of power (up 1.6 percent), educational (up 1.1 percent), and commercial (up 0.2 percent) projects. Over the past 12 months, the largest increase in public construction spending was in the transportation sector (up 5.2 percent), with the greatest declines seen in for commercial (down 27.7 percent) and office (down 12.9 percent) developments.
Chad Moutray is the chief economist, National Association of Manufacturers.
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