Construction Spending Jumps 8.0% in January

According to the Census Bureau, the value of construction put in place in January 2014 was $64,689 (millions of real dollars). Compared to one year ago, spending in January was up 8.0%. This is the fastest rate of month-over-month growth since November 2012. Also, the month-over-month rate of growth has increased each of the last two months. The annual rate of change, which generally has been growing at a slower and slower rate since December 2012, grew at a faster rate in January.

Real construction spending is linked closely to real consumer spending. Real consumer spending has been growing at a constant rate since May 2013. However, spending looks like it might start growing at a slightly faster rate in upcoming months. This could be an indication that real construction spending continue to grow at a faster rate. However, if consumer spending growth stays flat or slowly decelerates, then it is likely that real construction spending will continue to grow at a slower rate.

Real construction spending is a good leading indicator for construction materials, hardware, and HVAC industrial production.