·
During October, the value of construction put in place fell 1.0% after a
downwardly revised 0.8% drop in September. It was the fifth decline in the
last six months. Consensus expectations had been for a 0.2% dip during
October.
· Residential building cratered 1.9%. This seventh consecutive monthly decline lowered the level of construction activity 10.2% below last December's peak. The 3.9% (-17.2% y/y) slide in new single family building was the largest, but only by a little, m/m drop during the last fifteen years. Spending on improvements made up for some that lost work and rose 1.5% (4.9% y/y).
· During the last twenty years there
has been an 84% correlation between the q/q change in the value of
residential building and its contribution to growth in real GDP.
· Nonresidential building slipped for the second consecutive month after a downwardly revised 0.6% September decline. The 0.7% October dip was notable for a 3.1% (+13.5% y/y) drop in manufacturing. Office construction also fell 1.6% (+26.7% y/y) but construction in the lodging sector continued to barrel ahead, by 9.0% (68.1% y/y). Multi-retail building also remained firm and posted a 1.3% (35.8% y/y) gain.
· Public construction spending increased 0.8% led by a 4.0% (11.3% y/y) jump in transportation spending. Highways & streets, nearly one third of the value of public construction spending, ticked up 0.3% (15.7% y/y).
· These more detailed categories represent the Census Bureau’s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.