Construction Spending: Fails to Rebound in September
November 1, 2016
Bottom Line: Construction, expected to rebound, fell again in September with declines across all sectors. Construction spending is now down over 4% annualized in the last six months and is slightly below its year ago levels. Homebuilding fell modestly, and is now just slightly above its year ago levels. Meanwhile, non-residential construction fell but is still modestly above its year ago levels. Public construction remains very weak, now down over 17% annualized in the last six months and nearly 8% in the last year. While the sector is volatile, it accounts for nearly 24% of total construction and bears watching. Construction Spending FELL by 0.4% in September, compared with market expectations for an increase of 0.5%. The August estimate was revised modestly higher from -0.7% to -0.5%, while the July, estimate was revised modestly higher from -0.3% to 0.5%. Construction spending is now -0.2% BELOW its year ago level but still 4.6% below its March 2006 peak. Residential Construction ROSE by 0.5%, Homebuilding is now 0.9% ABOVE its year ago level. Nonresidential Construction FELL by 1.0%. Nonresidential construction growth is now 4.1% ABOVE its year ago level. Public Construction FELL by 0.9%, and is now 7.8% BELOW its year ago level.
Article by Contingent Macro Advisors