Real Construction Spending Up 4.4% in May 2013

According to the Census Bureau, the value of construction put in place in May 2013 was $74,858 (millions of real dollars). This was an increase of 4.4% from May 2012. Real construction spending has grown month-over-month since January 2012. However, the rate of month-over-month growth has slowed in 2013. The annual rate of change is still growing, but it has grown more slowly for five straight months.

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. But, 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.