Econoday Report: Construction Spending 3, 2005

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Construction Spending

Definition
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 1/3/05 For Nov 2004

Construction Spending, M/M change
Actual	-0.4%
Consensus	0.2%
Consensus Range	-0.5% to 0.9%

Highlights
Construction spending fell 0.4 percent in November, just about reversing the previous month's 0.3 percent gain; the figures were slightly weaker than expected. Residential construction expenditures decreased 0.3 percent with declines in single family unit construction. Multi-family units posted a slight 0.2 percent hike. Single family construction is still up 10.7 percent from a year ago, but the monthly trend has shown moderation in the past few months as housing starts have started to drop. We are likely to see further declines, albeit modest, in the next few months.

Nonresidential construction spending dropped 1.2 percent in November, due primarily to declines in office buildings as well as manufacturing plants. Overall, nonresidential spending is only up 2.5 percent from last November. Often, growth in the nonresidential sector will start to improve when expansion in the residential sector moderates. Thus far, we have seen little growth in nonresidential structures.

Market Consensus Before Announcement
Construction spending was unchanged in October, the weakest showing after steady increases between February and September. The residential market has slowed despite historically low interest rates and this has put a damper on total construction expenditures.

Construction spending Consensus Forecast for Nov 04: 0.2 percent
Range: -0.5 to +0.9 percent

Trends

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.

Data Source: Haver Analytics

2005 Release Schedule

Released On: 1/3 2/1 3/1 4/1 5/2 6/1 7/1 8/1 9/1 10/3 11/1 12/1

Released For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct