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 10/3/05 For Aug 2005

Construction Spending, M/M change
Actual	0.4%
Consensus	0.5%
Consensus Range	-0.1% to 0.8%

Highlights
Construction spending rose 0.4 percent in August after increasing 0.3 percent in July, just about in line with expectations. Private residential expenditures inched up only 0.2 percent due to a drop in spending on new multi-family housing projects. Private non-residential construction spending increased 0.8 percent in August, twice as fast as in July. This brought the year-over-year gain up to 3.7 percent, although this is still slower than the 5.9 percent year-over-year gain in private residential construction. Among the non-residential sector, gains were largest for power plans, transportation, and manufacturing, followed by office buildings and commercial buildings. Public expenditures increased 0.5 percent with a healthy gain in highway and street construction.

Keep in mind that this report is pre-Katrina and Rita.. Also, construction expenditures are likely to be hardly monitored this morning in light of the larger-than-expected gain in the ISM manufacturing index.

Market Consensus Before Announcement
Construction spending was roughly unchanged in July after decreasing in two of the three previous months. August figures are pre-Katrina and Rita and will be discounted to some extent by market players.

Construction spending Consensus Forecast for Aug 05: 0.5 percent
Range: -0.1 to 0.8 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