Construction Spending: Declines Modestly

January 4, 2016
Construction Spending FELL by 0.4% in November, compared with market expectations for an increase of 0.6%. The October estimate was revised modestly lower from 1.0% to 0.3%, while the September, estimate was revised modestly lower from 0.6% to 0.2%. Construction spending is now 10.5% ABOVE its year ago level but still 6.9% below its March 2006 peak. Residential Construction ROSE by 0.3%, reflecting the recent gains in housing starts. Homebuilding has been o slowly improving trend and is now 10.8% ABOVE its year ago level. Nonresidential Construction FELL by 0.7%. Nonresidential construction year-over-year growth had been improving since January 2012 but at a much weaker pace amid substantial volatility until February 2013 -- but then it dropped until September 2013 and is now 13.6% ABOVE its year ago level. Public Construction FELL by 1.0% and is now 6.0% ABOVE its year ago level. Public construction had been on a declining trend until March 2014 but is now increasing moderately. Bottom Line: Construction spending fell modestly in November with declines in nonresidential and public construction. There were modest downward revisions to the prior two months estimates. Homebuilding increased modestly and the year-over-year growth is now increasing moderately. Non-residential construction year-over-year is still rising moderately. Finally, public construction fell but is now modestly above its year ago levels. Overall, construction spending is still growing moderately on a year-over year basis.
Article by contingentmacro