Construction Expenditures through September 2014

Each month the Commerce Department issues its construction put in place (CPIP) data on the first working day covering activity two months earlier. September data was released on November 3rd. Construction put in place is based on spending work as it occurs, estimated for a given month from a sample of projects. In effect the value of a project is spread out from the project’s start to its completion. Construction starts data published by the Commerce Department for residential construction and by McGraw Hill / Dodge and Reed Construction for non-residential is completely different as in these cases the whole project is entered to the data base when ground is broken. The official CPIP press report gives a very limited view of expenditures and trends on a historical basis. The detail is hidden in the published data tables which we at SMU dissect to try to provide some meaningful guidance for those readers whose businesses target this industry. This is a very broad and complex subject therefore to make this monthly write up more comprehensible we are keeping the information format as consistent as possible.

Total Construction: Data is reported on both a seasonally adjusted and non-adjusted basis. In the SMU analysis we consider only the non-seasonally adjusted data and remove seasonality by the consideration of year over year (y/y) data. We also focus on rolling 3 and 12 months to remove the noise in single month numbers. Please note that the official news release from the Commerce Department may at first glance seem to conflict with the SMU analyses because the government commentary is all about seasonally adjusted numbers.