Construction spending fell more than expected to close out 2022, according to the Census Bureau’s latest construction spending report.
- M-O-M: Construction spending fell 0.4% to a seasonally adjusted annual rate of $1,809.8 billion, this almost a full point worse than November’s 0.5% jump and is the biggest drop since August.
- Y-O-Y: Spending ended the year down 7.7% when compared to the same time last year.
Swing & A Miss. Economists predicted that spending would see a slight 0.1% dip.
Single Family Slump. Single family construction spending fell for the 7th straight month to a seasonally adjusted annual rate of 384.44B, this 2.3% lower than November and down 14.7% when compared to December 2021.
- Multifamily was the one bright spot in 2022 ending the year up to a seasonally adjusted annual rate of of $120 billion, this was up 3.2% in December and is 20.7% higher than the same time last year.
BOTTOM LINE: The pandemic and fear of COVID inflated demand for single family and depressed demand for multifamily. Last year was about rebalancing the scale. It’s important to remember that homebuilder confidence plummeted 62% in 2022. Therefore, single-family spending falling 20.7% isn’t that bad all things considered.