Construction Expenditures through September 2015 and Dodge Forecast for 2016

Each month the Commerce Department issues its Construction Put in Place (CPIP) data, usually on the first working day covering activity two months earlier. September data was released on Monday November 2nd.

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, by Dodge Data & Analytics and Reed Construction for non-residential and Industrial Information Resources for industrial construction is completely different as in these cases the whole project is entered to the data base when ground is broken. This results in the starts data being extremely spiky which is not the case with CPIP. In September there continued to be a situation where the CPIP data as we report below was very strong but the starts data is less so. Normally starts lead ongoing expenditures by six to nine months. Dodge Data Analytics for who we have great respect, reported that the value of new construction starts in September dropped 5 percent from the previous month to a seasonally adjusted annual rate of $523.7 billion. Decreased activity was reported for both nonresidential building and housing, while the non-building construction sector managed a partial rebound after its August decline. Through the first nine months of 2015, total construction starts on an unadjusted basis were $497.4 billion, up 12 percent from the same period a year ago. Excluding the electric utility and gas plant category, which soared earlier in 2015 due to the start of several massive liquefied natural gas (LNG) terminals, total construction starts during the first nine months of 2015 would be up 5 percent relative to last year.