Real Construction Spending Grows 3.1% in March

According to the Census Bureau, the value of construction put in place in March 2013 was $63,500 (millions of real dollars). This was an increase of 3.1% from March 2012. For the first three months of 2013, the month-over-month rate of change has been roughly 3.0%. This  is the slowest month-over-month rate of growth since January 2012, which is when construction spending first started growing after the financial collapse in 2008. The annual rate of change is still growing at a rate of 7.0%, which is much faster than the historical average. However, the rate of growth has slowed each of the last three months. And, it likely will continue to slow into the summer.

Real construction spending is linked very closely to real consumer spending. However, in 2011 and 2012, real construction spending lagged real consumer spending quite a bit. The chart below indicates that real construction spending is likely to slow for much of 2013. However, if real consumer spending continues on its accelerating growth trend, then the growth in construction spending should remain relatively strong.

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