Highlights
Construction spending in contracted further in April but not by as much as expected. Construction outlays dropped another 0.4 percent, following a 0.6 percent decline in March. April's decrease was not as bad as the market forecast for a 0.6 percent fall. The April decrease in construction spending was led by a sharp 2.3 percent fall in private residential outlays with public spending also down 0.3 percent. However, private nonresidential construction spending advanced 1.6 percent in the latest month. Essentially, housing construction is still depressed by excess supply of unsold homes and the public sector may be seeing a slowing due budget problems at the state government level. But businesses are optimistic enough to continue to expand in the nonresidential sector. Equities should like the numbers - especially since the ISM manufacturing index also was not as bad as expected and was almost flat. Interest rates may firm on the news.

Weakness in the private residential component was led by a 4.4 percent fall in single-family outlays as multifamily spending edged up 0.4 percent.

The private nonresidential component saw a broad-based gain in April and was led by a strong gain in lodging. Other subcomponents that advanced were commercial, health care, educational, religious, transportation, power, and manufacturing. Subcomponent declines were only seen in amusement & recreation and in communication.

On a year-on-year basis, overall construction outlays were down 3.9 percent in April, compared to down 3.3 percent in March.

2008 Release Schedule

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