Residential Construction Rises in April

By:: Peter King | June 01, 2010

Private residential construction rose a seasonally adjusted 4.4 percent in April, as homebuyers moved to take advantage of an expiring federal tax credit.

The rise was part of a 2.7 percent increase in all types of construction spending for the month, as reported by the Census Bureau this morning, the biggest increase in 10 years.

The value of private residential construction put in place in April was estimated at an seasonally adjusted rate of $263 billion, after remaining flat in March at $252 billion. Public spending added another $9 billion to April’s total residential construction rate.

The increase corresponds to a 15 percent jump in sales of new single-family homes during April, which the Census Bureau reported last week.

April’s total in private residential construction represented a 4.1 percent annual gain, one of the few construction categories to show an annual increase from April 2009. Overall, private residential construction remains well below half of the peak annual rate of $673 billion reached in February 2006.

Public residential construction spending added another $9.1 billion to April’s rate, for a total rate of $272 billion for the month.

Residential construction accounted for a little less than half of all private construction and just under one-third of total construction spending in April. Overall construction spending of all types was reported at an annual seasonally adjusted rate of $869 billion for the month, up from $846 billion in March but representing a 10.5 percent decline from $871 billion in April 2009.

Private construction spending accounted about two-thirds of the total, at a rate of $566 billion in April. That figure represents as 2.9 percent increase the March rate of $550 billion, but a decline of 13.5 percent from the April 2009 rate of $654 billion.

Among all categories of private construction, only residential construction and power plants showed annual increases in the current monthly data. The overall public construction rate was down 4.4 percent compared to April 2009, although transportation construction showed an annual increase of 29.1 percent, to an annual rate of $30 billion.

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