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 10/1/08 For Aug 2008 | ||||||||||||
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Highlights
Construction spending in August came in better than expected but with mixed components. Construction outlays were unchanged in August, following a decline of 1.4 percent in the prior month. The August figure was better than the market forecast for a 0.5 percent decrease. Strength in the latest month was primarily in public outlays, which rose 0.8 percent after a 1.3 percent boost in July. Residential outlays rebounded 0.3 percent after a 3.9 percent fall the prior month. But the private nonresidential component is showing new weakness, declining 0.8 percent in August, following a 1.1 percent decrease in July.
Declines in the private nonresidential component were widespread. The latest subcomponent decreases were commercial, down 0.6 percent; health care, down 0.8 percent; educational, down 0.7 percent; religious, down 2.6 percent; amusement & recreation, down 2.5 percent; transportation, down 2.1 percent; communication, down 5.2 percent; power, down 1.9 percent; and manufacturing, down 0.3 percent.
The list of positives for nonresidential was short - lodging rose 2.0 percent while office advanced 0.8 percent.
On a year-on-year basis, overall construction outlays were unchanged at down 5.9 percent in August.
While the overall number for August was better than expected, the detail suggests that the trend is still downward - with the further drop in nonresidential indicated that construction weakness has widened beyond housing. Today's construction numbers add to the argument that third quarter GDP is going to be sluggish at best.
Construction spending fell 0.6 percent in July, following a rise of 0.3 percent in June. The July decrease was led by private residential outlays which fell 2.3 percent. Private nonresidential outlays also declined -- by 0.7 percent -- while public expenditures rose 1.4 percent. Given recent weakness in starts, another slip in the residential component is likely in August. Also, weakening revenues for state and local governments could lead to soft government construction.
Construction spending Consensus Forecast for August 08: -0.5 percent
Range: -1.5 to 0.0 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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