All signs and numbers point to a huge year for the US construction industry, declared CNBC Thursday. Construction spending in the US is soaring, rising more than expected in November to a record US$1.257 trillion, according to the Commerce Department. That was up 2.4 per cent annually.
US PRIVATE RESIDENTIAL CONSTRUCTION SPENDING: NOVEMBER 2017
The US National Association of Home Builder analysis of Census Construction Spending data shows that total private residential construction spending rose +1 per cent in November to a seasonally adjusted annual rate of US$530.8 billion. It was the highest level since February 2007. Total private residential construction spending was +7.9 per cent higher than a year ago.
The monthly gains are largely attributed to the strong growth of spending on single-family. Single-family construction spending rose to a US$270.1 billion annual pace in November, up by +1.9 per cent. It was the highest monthly annual rate since November 2007. This is in line with the strong readings of single-family housing starts and solid builder confidence. Remodelling spending increased by +0.7 per cent in Novem- ber. However, multifamily construction spending slipped -1.3 per cent after the September and October declines, and was -1.7 per cent lower since a year ago.
The NAHB construction spending index illustrates the strong growth in new multifamily construction from 2010 to April 2017, and a steady growth in single-family construction and home improvement spending.
US Pending Home Price Index: November 2017
Elsewhere, the US Pending Home Sales Index (PHSI), reported by the National Association of Realtors (NAR) January 4, increased slightly, by +0.2 per cent, in November and is +0.8 per cent above a year ago.
The PHSI increased +4.1 per cent in the Northeast and +0.4 per cent in the Midwest, but decreased -0.4 per cent in the South and -1.8 per cent in the West. Year-over-year, the PHSI increased +2.5 per cent in the South, +1.1 per cent in the
Northeast, and +0.8 per cent in the Midwest, but decreased -2.3 per cent in the West.
NAR projected that existing home sales and price growth will slow because of altered tax benefits in some high cost areas. However, existing sales surged in November, and builder confidence is strong. Job growth, increasing homeownership rates and limited inventory are the right combination to spur continued growth in new residential construction.