January Construction Spending Up 2.9 Percent

The growth of total construction on a rolling 12-month basis year over year has slowed every month from January 2017 through January 2018. On a rolling three-month year-over-year basis, the situation is better, with growth improving every month from September through January. Hopefully, this trend will continue. Construction expenditures data is developed by the Department of Commerce and is referred to as CPIP (construction put in place). Since construction is extremely seasonal, the growth or contraction we report in this analysis has had seasonality removed by providing only year-over-year comparisons.

At SMU, we analyze the CPIP data with the intent to provide a clear description of activity we believe accounts for about 45 percent of total U.S. steel consumption. See the end of this report for more detail on how we perform this analysis and structure the data. In particular, note that we present non-seasonally adjusted numbers. Much of what you will see in the press may differ from our presentation because others base their comments on adjusted values. Our rationale is that construction is highly seasonal and our businesses function in a seasonal world. Also, we don’t understand how the adjustments are made, nor do we trust them.