New residential construction spending rose 1.2% in November after edging up 0.2% in October. Spending in this sector has now increased in five of the last six months. Single-family construction spending rose 1.5%, its sixth consecutive monthly increase. However, multifamily construction spending fell for the third month in a row, down 0.1% in November following a 1.5% decrease in October.
Despite the recent setback for multifamily construction spending, our outlook for the sector remains positive. Continued low interest rates, falling vacancy rates, and rising rents bode well for multifamily construction. We also expect continued slow recovery in single-family construction as the national economy shows slightly more strength, resulting in stronger hiring, bolstering consumer confidence. Thus the outlook is for slow, but steady improvement in residential construction. The forecast is for new residential construction spending to increase 6.3% in 2012 and 8.0% in 2013.
Residential Construction Data |
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| Monthly Figures (1) (latest actual values) |
3-Month Moving Average |
Actual | Forecast | |||||||||
| Oct-11 | Nov-11 | Dec-11 | Oct-11 | Nov-11 | Dec-11 | 2008 | 2009 | 2010 | 2011† | 2012 | 2013 | |
| Northeast Starts | 64 | 97 | 57 | 60 | 73 | 73 | 121 | 62 | 72 | 67.6 | 76 | 89 |
| Month-over-Month % Change | 8.5% | 51.6% | -41.2% | -10.4% | 22.2% | -0.9% | ||||||
| (Year-over-year % change of NSA data) | -22.7% | 40.0% | -2.5% | -15.3% | -48.9% | 15.9% | -5.6% | 12.8% | 16.1% | |||
| Midwest Starts | 110 | 93 | 144 | 98 | 100 | 116 | 135 | 97 | 98 | 100 | 115 | 127 |
| 12.2% | -15.5% | 54.8% | 7.3% | 2.4% | 15.3% | |||||||
| 14.9% | -19.5% | 132.4% | -35.8% | -28.0% | 0.8% | 1.7% | 15.5% | 10.0% | ||||
| South Starts | 322 | 330 | 320 | 317 | 326 | 324 | 453 | 278 | 298 | 307 | 335 | 374 |
| -1.5% | 2.5% | -3.0% | 1.7% | 3.1% | -0.7% | |||||||
| 23.6% | 27.8% | 18.4% | -33.4% | -38.6% | 6.9% | 3.1% | 9.3% | 11.5% | ||||
| West Starts | 132 | 165 | 136 | 145 | 153 | 144 | 196 | 117 | 120 | 133 | 150 | 191 |
| -18.5% | 25.0% | -17.6% | -0.5% | 5.5% | -5.7% | |||||||
| 37.7% | 79.7% | 0.0% | -38.9% | -40.5% | 2.7% | 11.0% | 12.5% | 27.4% | ||||
| Total Starts (2) | 628 | 685 | 657 | 620 | 653 | 657 | 906 | 554 | 587 | 607 | 676 | 779 |
| -2.8% | 9.1% | -4.1% | 0.7% | 5.4% | 0.6% | |||||||
| 17.2% | 27.8% | 23.7% | -33.2% | -38.8% | 5.9% | 3.4% | 11.4% | 15.3% | ||||
| Total Single-family Starts | 437 | 450 | 470 | 428 | 436 | 452 | 622 | 445 | 471 | 429 | 465 | 512 |
| 3.6% | 3.0% | 4.4% | 0.5% | 1.9% | 3.7% | |||||||
| 0.6% | -1.8% | 10.2% | -40.5% | -28.4% | 5.9% | -9.0% | 8.4% | 10.1% | ||||
| Total Multifamily Starts | 191 | 235 | 187 | 192 | 217 | 204 | 284 | 109 | 116 | 178 | 211 | 268 |
| -14.7% | 23.0% | -20.4% | 1.1% | 13.0% | -5.7% | |||||||
| 80.9% | 156.6% | 73.6% | -8.3% | -61.6% | 6.2% | 54.1% | 18.5% | 26.6% | ||||
| New Home Sales (3) | 307 | 314 | 307 | 300 | 308 | 309 | 485 | 375 | 323 | 302 | 322 | 353 |
| 1.7% | 2.3% | -2.2% | 1.4% | 2.7% | 0.5% | |||||||
| 8.7% | 10.0% | -100.0% | -37.5% | -22.7% | -13.9% | -6.5% | 6.5% | 9.6% | ||||
| Manufactured Home Shipments | 56 | 69 | NA | 55 | 60 | NA | 82 | 50 | 50 | 49 | 58 | 69 |
| 2.4% | 22.7% | 7.8% | 9.1% | |||||||||
| 40.8% | 54.1% | -14.5% | -39.3% | 0.7% | -1.5% | 17.6% | 18.5% | |||||
| Residential Construction Spending (Billions Current $) | ||||||||||||
| New Single-family | 107.4 | 109.1 | NA | 107.0 | 107.8 | NA | 185.8 | 105.3 | 112.6 | 106.9 | 113.4 | 121.5 |
| 0.5% | 1.5% | 0.5% | 0.8% | |||||||||
| 1.1% | 2.8% | -39.1% | -43.3% | 6.9% | -5.1% | 6.1% | 7.1% | |||||
| New Multifamily* | 22.4 | 22.3 | NA | 22.8 | 22.5 | NA | 51.2 | 35.9 | 23.7 | 22.1 | 23.7 | 26.6 |
| -1.5% | -0.1% | 0.8% | -1.4% | |||||||||
| -6.3% | -9.3% | -8.1% | -30.0% | -34.0% | -6.7% | 7.2% | 12.3% | |||||
| New Residential** | 129.8 | 131.4 | NA | 129.7 | 130.2 | NA | 237.0 | 141.2 | 136.2 | 129.0 | 137.1 | 148.1 |
| 0.2% | 1.2% | 0.6% | 0.4% | |||||||||
| -0.2% | 0.6% | -34.3% | -40.4% | -3.5% | -5.3% | 6.3% | 8.0% | |||||
| Residential Improvements*** | 117.1 | 120.0 | NA | 112.6 | 116.4 | NA | 120.7 | 112.7 | 112.5 | 116.4 | 122.7 | 128.2 |
| 4.4% | 2.5% | 3.6% | 3.4% | |||||||||
| 2.8% | 6.1% | -13.5% | -6.6% | -0.2% | 3.5% | 5.4% | 4.5% | |||||
| Total Residential**** | 246.9 | 251.4 | NA | 242.3 | 246.7 | NA | 357.7 | 253.9 | 248.7 | 245.4 | 259.8 | 276.3 |
| 2.1% | 1.8% | 2.0% | 1.8% | |||||||||
| 1.3% | 3.0% | -28.5% | -29.0% | -2.1% | -1.3% | 5.9% | 6.3% | |||||
Housing starts, home sales, and manufactured home shipments are all in thousands. |
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Read more forecasts from Reed Construction Data:
Construction Spending Advances in November
Nonresidential Building Construction Ekes Out a Small Gain in November
Heavy Engineering (Non-Building) Construction Posts its Fourth Consecutive Gain in November
