Construction Spending Moves Higher

A rebound in multi-family units helped drive construction spending 1.8 percent higher in April to fully reverse the prior month's 1.7 percent decline. Spending on multi-family units rose 3.6 percent in the month following March's 4.3 percent decline in a gain, however, that can't overshadow no change for spending on single-family homes. But home improvements were a big positive rising 0.7 percent in the month.

Non-housing data are mixed with private nonresidential, led by transportation and power, up a strong 0.8 percent but with highways & streets down 1.0 percent.

This report is often very volatile making year-on-year readings useful to gauge trends. And there is clear strength here, with total spending up 7.6 percent including a very strong 9.6 percent gain for single-family homes that puts April's no change in perspective. Housing is in short supply which has been holding down home sales and the question for the sector is whether builders can pick up their pace to meet demand.