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 2/1/08 For Dec 2007 | ||||||||||||
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Highlights
Construction spending in December fell sharply. Construction outlays fell 1.1 percent in December, following 0.4 percent decline in November. The drop in December was worse than the market projection for a 0.5 percent fall. December's drop in construction spending was led by a 2.8 percent drop in private residential outlays. Public outlays also declined 1.5 percent. On the positive side, private nonresidential rose 1.3 percent in December, following a 1.8 percent gain the prior month.
By components nonresidential gains were broad based and seen in office, up 1.1 percent; health care, up 0.5 percent; amusement, up 0.6 percent; communication, up 6.2 percent; power, up 0.7 percent; manufacturing, up 6.7 percent; educational, up 1.3 percent; and transportation up 1.1 percent. By components nonresidential declines were seen in lodging, down 0.4 percent; commercial, down 1.1 percent; and religious, down 2.9 percent.
On a year-on-year basis, overall construction outlays were down 2.3 percent in December.
Today's numbers continue to show housing to be in recession while the nonresidential component has resumed its positive contribution to economic growth. But recent interest rates cuts eventually will boost both - although housing will take a while to recover given current supplies on the market.
Construction spending in November unexpectedly rebounded slightly, led by nonresidential and public construction. Construction outlays rebounded 0.1 percent in November, following a 0.4 percent fall in October. November's gain in construction spending was led by a 2.5 percent jump in public outlays. Private nonresidential posted a 1.7 percent boost while private residential fell 2.5 percent. Expectations are for residential outlays to continue to fall while nonresidential may be softening. The nonresidential component has been keeping total outlays out of negative territory but that may be changing if nonresidential outlays are weakening. The Fed's Beige Book recently has noted some softening in this sector.
Construction spending Consensus Forecast for December 07: -0.5 percent
Range: -0.8 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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