Recent Updates

  • US: Consumer Credit, Wholesale Trade (Jun), Employment Situation (Jul)
  • Global Sector PMI (Jul)
  • International Surveys: WMA Investor Outlook Survey (Jul)
  • Mauritius: CPI (Jul)
  • more updates...

Economy in Brief

U.S. Construction Spending Holding Steady
by Carol Stone July 1, 2009

Construction outlays fell 0.9% in May, reverting to a decline after April's limp 0.6% increase. That was revised from a 0.8% rise and March was revised to a 0.4% decrease from a 0.4% increase reported last month. This report included annual revisions, which began in January 2007; the level in 2007 was revised up slightly. For 2008, several months are lower than before, but the steepness of the late-year decline was moderated, leaving recent levels basically unchanged from previous reports.

Private nonresidential building outlays remain a main support to overall construction, with a 0.5% gain in May following 1.3% in April. However, the historical revisions cut earlier months, and the sector has shown year-to-year declines now since January. May was down 3.3% from a year ago.This masks divergent trends among divisions: communications are off 28.3% from May 2008 but transportation is now up 5.9%, its first year/year increase this year after a steep drop during the winter. Office construction, with a tiny 0.1% rise in May, may be stabilizing after a continuous month/month contraction since last September; year-on-year, it is off 18.2%. The most traditional forms of private nonresidential construction, power plants and manufacturing facilities, are expanding, with power up 12.0% from a year ago and manufacturing a strong 55.6%.

Residential building activity continues weak. It fell 3.4% month-to-month in May and April's previously reported 0.7% increase was revised to a 0.3% cut. Year-on-year, it is off 33.9%. The best we can say is that this last figure is a bit less severe than April's initially reported 35% drop. Single-family home construction is down 54.1% y/y, although May's monthly performance was down "just" 4.5%, the smallest decline since last August.

Public construction edged down in May by 0.6%, while April's previously reported 0.6% decrease was revised to a 0.2% rise and March's 1.0% increase is now calculated at 2.2%. Year-on-year, public sector activity is up 3.4%, little different from the prior report of 3.3%. By type, spending on highways and streets is ratcheting lower, with May down 1.3% from April and 0.5% from May 2008. Education, the other big category, has, by contrast, been gaining in most months so far this year; May was up 0.4% on the month and 4.7% on the year. School-building has, with occasional interruption, sustained an uptrend through much of the last five or six years.

The construction put-in-place figures are available in Haver's USECON database.

Construction (%) May April March Y/Y 2008 2007 2006
Total -0.9 0.6 -0.4 -11.6 -6.9 -1.6 6.3
Private -1.0 0.8 -1.6 -17.4 -11.1 -5.7 5.5
  Residential -3.4 -0.3 -4.6 -33.9 -29.1 -19.7 1.0
  Nonresidential 0.5 0.2 0.4 -3.3 13.2 23.1 16.2
Public -0.6 -0.6 2.2 3.4 5.6 13.1 9.3
large image