Spending on construction in the US rose from a seasonally adjusted annual rate of $822.5 billion in April to $830 billion in May, a rise of 0.9%. Year-over-year, May’s total is up 7% higher than than May of 2011, and for the first 5 months of 2012, construction spending is up 9.4% compared to the first five months of last year.
The consensus estimate among economists called for a month-over-month gain of 0.2%.
Private construction accounted for $560.4 billion of the May 2012 total, up 1.6% from April, with residential construction rising 3% and non-residential construction up 0.4%. Public construction fell slightly month-over-month to $269.6 billion, down -0.4% from April’s revised total. Construction of education facilities fell -3% in May and highway construction was down -0.5%.
Single-family residential construction spending is up 14.8% year-over-year and multi-family construction spending is up 50.3%.
The rise in residential construction underscores recent earnings results from homebuilders Lennar Corp. (NYSE: LEN) and KB Home (NYSE: KBH). Growth is coming back to the private construction business, but the drop in public spending, particularly in educational facilities construction, highlights the weakness in employment and tax collections to pay for new public facilities. The US economy is doing better, just not that much better.