Friday’s report on first quarter GDP was well below economist’s forecasts but hardly a surprise or disappointment (not sure how those two things can be true but…). When you dig into the details you see that without construction spending, the economy would have actually contracted in the first quarter compared to the fourth quarter of 2016. The overall GDP growth number was 0.7 percent but big gains in residential construction (0.5 points) and non-residential investment (1.1 points) added 1.6 points to the growth. The rest of the economy dragged GDP down 0.9 points. Within the non-residential investment number, which includes all business investment, spending on non-residential construction was up 22.1 percent. That means that without construction, the non-residential investment number would have been flat or worse.

Today’s announcement on March construction showed that the first quarter of 2017 was up 4.9 percent over the first quarter of 2016. The $1.218 trillion in spending is the highest on record. The trends represented in the number were consistent with past months. Commercial construction was up 12.7 percent. Public construction was down 6.5 percent.