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 9/4/07 For Jul 2007 | ||||||||||||
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Highlights
Construction spending declined 0.4 percent in July, following a revised 0.1 percent rise in June. The July decrease was below market expectations for no change (zero percent) in construction outlays. The July drop in construction was led by the residential component as both nonresidential and public construction posted strong gains. June's overall figure was revised up to plus 0.1 percent from minus 0.3 percent for the initial estimate.
On a year-on-year basis, overall construction outlays rose to down 2.0 percent in July from down 2.6 percent in June.
By sectors, private residential construction fell 1.4 percent in July, following a 0.6 percent decline in June. Public outlays rose 0.7 percent in the latest month, following a 1.0 percent boost in June. Private nonresidential construction advanced 0.4 percent in July, equaling the gain the prior month.
By components nonresidential gains were seen in lodging, up 0.8 percent; office, up 0.6 percent; commercial, up 1.0 percent; health care, up 1.3 percent; religious, up 3.2 percent; power, up 0.5 percent; manufacturing, up 0.4 percent; educational, up 1.1 percent; and transportation up 0.4 percent.
By components nonresidential declines were seen in amusement, down 4.1 percent, and communication, down 2.2 percent.
The overall impact of construction on the economy is that there is still support for moderate economic growth due to the nonresidential and public sectors offsetting a major part of residential weakness. Manufacturing is continuing to be a plus as indicated by today's ISM report. For today, however, markets are likely focusing on this afternoon's motor vehicle sales to get a better read on the critical consumer sector.
Construction spending fell 0.3 percent in June, following a 1.1 percent surge in May. The June drop in construction was led by private residential outlays with public construction outlays also declining. Nonresidential construction continued its uptrend. We can expect continued weakness for residential outlays in July, given the on-going oversupply of houses. Nonresidential and public construction spending are likely to post gains in line with good fundamentals in those sectors.
Construction spending Consensus Forecast for July 07: 0.0 (flat) percent
Range: -0.6 to +0.2 percent
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Over the last year, a decline in residential outlays has pulled down year-on-year growth for overall construction outlays. Nonresidential and public outlays are positive with nonresidential actually strong. |
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