Revisions to Construction Spending Data for 2011-13

07/16/2013 by Bernard M. Markstein

After the original publication of this article on the Reed website, the Census Bureau discovered an error in the tabulation of the revised residential improvements spending data for 2012. The current article has been changed to reflect the correct estimates. Due to the correction in the residential improvements spending data, the residential spending total, and total construction spending estimates were changed. The corrected revised estimates will be available to the public with the release of the June 2013 construction spending data on August 1, 2013.

Each year the United States Census Bureau revises its construction spending numbers for the prior two years based on more complete information than was available when the data were previously reported. These revisions are usually made available with the release of the May construction spending data at the beginning of July. This year, among the categories with the most significant revisions were residential improvements, manufacturing, and power construction spending.

Total construction spending was somewhat better in 2011 and in 2012 than previously reported. All the major construction categories (Nonresidential Building, Heavy Engineering, and Residential) followed this pattern, although the revisions for Residential construction spending were notably larger than those for the other categories — both in dollar and percentage terms. For Nonresidential Building and Heavy Engineering, the upward revision for 2011 was greater than the downward revision for 2012. For Residential construction spending, however, the 2012 downward revision exceeded the 2011 upward revision.

So far this year (through April), the average monthly revisions for Nonresidential Building and Heavy Engineering spending have been negative, while those for Residential spending have been positive. Nonresidential Building spending has been dominated by downward revisions in manufacturing spending. Heavy Engineering has been dominated by downward revisions in power spending. Residential has been dominated by upward revisions in Residential Improvements spending.

Each percentage in this article is calculated as the difference between the revised spending number and the most-recent pre-revision spending number available (the number available as of the June 2013 report, which provided April 2013 construction spending data) divided by the pre-revision spending number.

Total Construction Spending Revisions
Total construction spending was revised up $9.8 billion for 2011 (+1.3% from the pre-revision number) and up $2.5 billion for 2012 (+0.3%). So far this year, the seasonally adjusted at an annual rate (SAAR) average monthly revisions (January through April) was $7.8 billion (+0.9% of the average monthly SAAR pre-revision level). For all of these revisions, Total Residential construction spending (largely driven by Residential Improvements in 2011 and 2013, and by Single-family construction spending in 2012) was the main factor behind the total revision numbers. For 2013, Heavy Engineering spending due to revisions in power spending was a large, but secondary factor.

U.S. Total Construction Spending Revisions
Difference between revised spending number and pre-revision spending number
(millions of U.S. current dollars)

  2011 2012 2013†
New Single-family 0 2,763 1,051
% change from previous report 0.0% 2.1% 0.7%
New Multifamily (1) 89 780 889
0.4% 2.9% 2.6%
New Residential (2) 89 3,543 1,940
  0.1% 2.3% 1.0%
Residential Improvements (3) 6,882 933 17,584
6.0% 0.7% 16.0%
Total Residential (4) (5) 6,971 4,477 19,524
2.8% 1.6% 6.4%
Nonresidential Building 869 -588 -1,757
0.3% -0.2% -0.6%
Heavy Engineering (Non-Building) 1,933 -1,426 -9,967
  0.8% -0.5% -3.8%
Total (5) 9,776 2,463 7,799
1.3% 0.3% 0.9%

† Year-to-date average of monthly seasonally adjusted data at an annual rate (average for January through April).
(1) New Multifamily = New Private Multifamily + New Public Multifamily - Public Improvements
(estimated by Reed Economics).
(2) New Residential = New Single-family + New Multifamily.
(3) Residential Improvements include remodeling, renovation and replacement work.
Number also includes Reed Economics estimate of improvements to public housing.
(4) Total Residential = New Single-family + New Multifamily + Residential Improvements.
(5) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce.

Nonresidential Building Construction Revisions
Nonresidential Building construction spending was revised up $0.9 billion (+0.2%) for 2011 and down $0.6 billion (-0.1%) for 2012. The 2013 year-to-date SAAR average monthly total revision was down $1.8 billion (-0.6%).

Manufacturing construction spending was the category with the largest dollar adjustments, down $1.7 billion (-4.2%) in 2011 and down $2.2 billion (-4.5%) in 2012. The 2013 year-to-date SAAR average monthly total revision was down $1.9 billion (-3.9%). The downward revisions in manufacturing construction spending flipped a previously reported gain of 2.6% for 2011 to a loss of 1.7% and reduced the 2012 gain from 18.6% to 18.1%.

Office construction spending revisions were almost as large, but in the positive direction. For 2011, spending was revised up $1.4 billion (+3.9%) and for 2012 spending was revised up $2.0 billion (+5.4%).

Health care construction spending also was subject to a large upward revision for 2012 — up $1.2 billion (+2.9%). This number was largely offset by a downward revision in amusement/recreation construction spending — down $1.0 billion (-6.3%).

U.S. Nonresidential Construction Revisions
Difference between revised spending number and pre-revision spending number
(millions of U.S. current dollars)

  2011 2012 2013†
For Lease 1,428 1,635 16
% change from previous report 1.6% 1.7% 0.0%
     Lodging 249 358 263
2.8% 3.2% 2.1%
     Office 1,364 1,955 358
  3.9% 5.4% 1.0%
     Commercial (mainly retail) -185 -678 -605
-0.4% -1.4% -1.3%
Institutional 1,163 -8 175
0.8% 0.0% 0.1%
     Healthcare 491 1,178 951
1.2% 2.9% 2.4%
     Education 665 -197 -195
  0.8% -0.2% -0.2%
     Religious 15 -134 -126
0.4% -3.4% -3.3%
     Public Safety 171 153 -6
  1.7% 1.5% -0.1%
     Amusement/Recreation -179 -1,008 -449
-1.1% -6.3% -3.2%
Manufacturing -1,722 -2,215 -1,947
  -4.2% -4.5% -3.9%
Total (1) 869 -588 -1,757
0.3% -0.2% -0.6%

† Year-to-date average of monthly seasonally adjusted data at an annual rate (average for January through April).
(1) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce.

Heavy Engineering (Non-Building) Construction Spending Revisions
Heavy Engineering (non-building) construction spending was revised up $1.9 billion (+0.8%) for 2011 and down $1.4 billion (-0.5%) for 2012. The SAAR monthly average 2013 year-to-date revision was reduced $10.0 billion (-3.8%).

Large revisions in power construction spending, which was revised up $1.2 billion (+1.6%) for 2011 and down $3.9 billion (-4.0%) for 2012, were a main driver for Heavy Engineering revisions. The year-to-date SAAR average monthly power spending revision already dwarfs these numbers, down $10.7 billion (-11.7%).

U.S. Heavy Engineering (Non-Building) Construction Revisions
Difference between revised spending number and pre-revision spending number
(millions of U.S. current dollars)

  2011 2012 2013†
Transportation -130 865 816
% change from previous report -0.4% 2.3% 2.1%
Communication 152 425 -798
0.9% 2.5% -4.9%
Power 1,220 -3,932 -10,668
  1.6% -4.0% -11.7%
Highway 426 1,082 236
0.5% 1.4% 0.3%
Water & Sewer 98 -66 359
0.3% -0.2% 1.1%
Conservation & Development 167 200 87
2.3% 3.3% 1.5%
Total (1) 1,933 -1,426 -9,967
0.8% -0.5% -3.8%

† Year-to-date average of monthly seasonally adjusted data at an annual rate (average for January through April).
(1) Total may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce.

New Residential Construction Spending Revisions
Total Residential construction spending was revised up $7.0 billion (+2.8%) for 2011 and up $4.5 billion (+1.6%) for 2012. New Residential construction spending was revised up slightly in 2011, +$0.1 billion (+0.1%), due to revisions in multifamily construction spending. For 2012, New Residential construction was revised up a much larger $3.5 billion (+2.3%), over three-quarters of which was an upward revision in single-family construction spending.

The 2013 year-to-date SAAR average monthly revision was large: +$19.5 billion (+6.4%) for Total Residential construction spending, which includes $1.9 billion (+1.0%) for New Residential construction spending and $17.6 billion (+16.0%) for Residential Improvements spending.

U.S. Residential Construction Data Revisions
Difference between revised spending number and pre-revision spending number
(millions of U.S. current dollars)

  2011 2012 2013†
New Single-family 0 2,763 1,051
     % change from previous report 0.0% 2.1% 0.7%
New Multifamily (1) 89 780 889
0.4% 2.9% 2.6%
New Residential (2) 89 3,543 1,940
  0.1% 2.3% 1.0%
Residential Improvements (3) 6,882 933 17,584
6.0% 0.7% 16.0%
Total Residential (4) 6,971 4,477 19,524
2.8% 1.6% 6.4%

† Year-to-date average of monthly seasonally adjusted data at an annual rate (average for January through April).
(1) New Multifamily = New Private Multifamily + New Public Multifamily - Public Improvements
(estimated by Reed Economics).
(2) New Residential = New Single-family + New Multifamily.
(3) Residential Improvements include remodeling, renovation and replacement work.
Number also includes Reed Economics estimate of improvements to public housing.
(4) Total Residential = New Single-family + New Multifamily + Residential Improvements.
Total Residential may not equal the sum of its components due to rounding.
Source: Census Bureau, U.S. Department of Commerce.