The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars. Why Investors Care
| Released on 1/3/07 For Nov 2006 | ||||||||||||
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Highlights
Construction spending declined 0.2 percent in November, following a 0.3 percent dip in October. The consensus had expected a 0.5 percent drop in construction outlays for November. On a year-on-year basis, overall construction outlays slipped to a 0.1 percent increase in November from a 1.2 percent year-on-year increase in October.
November's decline was led by private residential construction as both private nonresidential and public outlays posted gains. Private residential construction fell 1.6 percent, following a 1.7 percent decline in October. Private residential construction was down 11.1 percent on a year-on-year basis, compared to down 9.1 percent in October.
Private nonresidential outlays jumped 1.4 percent in November, following a 0.5 percent increase in October. Within private nonresidential construction, components were up broadly. By components nonresidential gains were seen in lodging, up 3.9 percent; office, up 1.0 percent; commercial, up 1.4 percent; health care, up 0.4 percent; educational, up 1.2 percent; religious, up 0.5 percent; amusement, up 0.5 percent; transportation, up 5.2 percent; power, up 2.7 percent; and manufacturing, up 1.3 percent. However, communication construction outlays fell 3.0 percent in November. Private nonresidential outlays were up 18.0 percent year-on-year in November, up slightly from 17.8 percent in October.
Public construction rose 1.0 percent in November, following a 1.9 percent jump in October. Public construction is up 10.6 percent year-on-year, compared to up 10.9 percent in October.
Today's report is somewhat on the positive side as the decline in private residential was not a surprise, although its decline was softer than in three of the prior four months. However, the improvement in the nonresidential component was stronger than expected by most. Indeed, construction is firming a little - keeping the economy on the soft landing instead of the hard landing. Equities should take the numbers to heart as favorable for overall continued moderate economic growth this year. Bonds are likely to soften on today's news - which should provide a little support for the dollar.
Construction spending declined 1.0 percent in October following a 0.8 percent drop September. October's drop was led by residential construction but nonresidential outlays also fell. While housing sales picked up a little in last week's reports, it is too soon to have an impact on actual construction and weakness in outlays will likely continue into early 2007.
Construction spending Consensus Forecast for November 06: -0.5 percent
Range: -0.7 to +0.7 percent
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Construction spending has moderated significantly over the past year despite strenth in the housing market. Residential construction is not growing as rapidly as it did even though current levels are high. Nonresidential construction has begun to improve, but gains are still modest. |
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