Manufacturing Construction Rose 3.8 Percent in January

By March 4, 2014Economy

The Census Bureau reported a 3.8 percent increase in manufacturing construction in January, more than offsetting the 3.4 percent decline of December. Manufacturing construction activity increased from $49.2 billion in December to $51.1 billion in January, its highest level since September. The sector has made significant gains over the past 12 months, particularly in the second half of 2013, with 7.9 percent year-over-year growth in construction spending. In January 2013, manufacturers put $47.3 billion of construction in place, but that fell to $43.3 by June before rebounding again starting in July.

Overall construction activity was only marginally higher in January, up 0.1 percent. It would have been higher if it were not for a sharp 0.8 percent decline in public construction spending for the month. The strongest element in this report was private sector residential construction, with a 1.1 percent increase in January and 14.6 percent year-over-year growth. In a sign of just how much the housing market has improved recently, private residential spending rose from $314.0 billion in January 2013 to $359.9 billion in January 2014, the highest level since May 2008.

Looking at private, nonresidential construction, manufacturing’s increase was the exception for the month, with spending down 0.2 percent. The other sector to experience an increase in construction in January was communications (up 18.2 percent). Organizations with the largest monthly declines were power (down 5.0 percent), religious (down 2.6 percent), commercial (down 2.2 percent), healthcare (down 1.6 percent), educational (down 1.3 percent), transportation (down 1.0 percent), and amusement and recreation (down 0.9 percent). On a year-over-year basis, the story was better, with a 9.7 percent increase over the past 12 months.

Chad Moutray is the chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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