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Economy in Brief
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
U.S. Initial Claims for Unemployment Insurance Are Little Changed
Initial unemployment insurance claims slipped to 232,000 (-6.1% y/y) during the week ended April 14...
U.K. Retail Sales Fall
U.K. GDP is expected to cool its jets when the first quarter GDP number is released...
by Tom Moeller August 1, 2008
The value of construction put in place fell 0.4% during June after having been unchanged in May. The decline was as-expected.Year-to-year construction was down 5.9% but the level of activity so far this year has been roughly stable.
Residential building activity, however, continued to decline in June by 1.8%. Since it's peak it has fallen by more than one-third. Single-family construction continued quite weak as it fell another 3.7% (-39.1% y/y). Building activity on multi-family units edged down 0.4% (-8.0% y/y). Spending on improvements has been edging higher since last November but it's still off 2.0% 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.
The value of nonresidential building activity rose another 0.8% led by a 1.2% (37.9% y/y) jump in lodging spending. Spending on health care facilities rose 0.6% (10.0% y/y) but office construction was roughly unchanged (12.8% y/y).
Public construction fell a slight 0.2%. The y/y gain of 5.2% is down from 12.3% growth last year. Nevertheless, spending on office structures continued quite firm at 26.5% y/y. The value of construction spending on highways & streets was roughly unchanged y/y. (The value of construction on highways & streets is roughly one third of the value of total public construction spending.) Building activity of educational facilities fell 1.5% (+4.2% y/y) during June.
The more detailed categories of construction represent the Census Bureaus 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.
Are Inflation Targets Good Inflation Forecasts? from the Federal Reserve Bank of Chicago is available here.
Construction (%) | June | May | Y/Y | 2007 | 2006 | 2005 |
---|---|---|---|---|---|---|
Total | -0.4 | 0.0 | -5.9 | -2.7 | 6.3 | 11.2 |
Private | -0.4 | 0.0 | -9.6 | -6.9 | 5.5 | 12.7 |
Residential | -1.8 | -1.1 | -26.7 | -19.8 | 1.0 | 14.9 |
Nonresidential | 0.8 | 1.1 | 15.0 | 19.6 | 16.2 | 7.8 |
Public | -0.2 | 0.1 | 5.2 | 12.3 | 9.3 | 6.2 |