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Economy in Brief

U.S. Construction Flat In October With Downward Revisions To Prior Months
by Tom Moeller December 2, 2009

It's the same story as in prior months, only more-so. October construction spending was unchanged after revisions lowered earlier months' activity. September outlays now are reported down 1.6%, double last months' estimate. Consensus estimates had been for a slight uptick in October activity.

Residential building activity did increase 4.4%, but a September gain was revised to a 2.0% decline. Single-family construction rose 1.9% (-30.7% y/y) for the fifth consecutive, firm monthly increase. Spending on improvements also firmed by 8.7% (-7.3% y/y) but September's initially reported 7.2% increase was revised to a 5.7% decline. Multi-family building continued down by 2.1% (-43.6% y/y) and was off 55.6% from the January 2007 peak.· Nonresidential building activity fell another 2.5% during October after a 3.6% September decline that was double the initial estimate. Since the 2008 peak activity has fallen by 20.6%. Spending in the food & beverage industry declined 32.5% y/y while expenditures in the lodging were off by nearly one-half. Commercial building overall fell 40.0% y/y while office building dropped by more than one-third. Relatively moderate was the y/y decline in the education, religious and health care sectors. · Public construction overall fell a modest 0.4% during October and y/y expenditures actually rose though tax revenues fell. Building activity on highways & streets fell just 0.3% m/m (+4.7% y/y) as the nation's infrastructure received more attention. Public spending on health care facilities reversed much of the prior month's gain with a 3.2% decline (+12.6% y/y) and building in the education sector rose 1.1% (-0.1% y/y).

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

Talking about Tomorrow’s Monetary Policy Today from the Federal Reserve Bank of San Francisco can be found here .

Construction (%) October September August Y/Y 2008 2007 2006
Total 0.0 -1.6 -0.9 -14.4 -6.9 -1.6 6.3
Private 0.3 -3.0 -0.5 -21.9 -11.1 -5.7 5.5
  Residential 4.2 -2.0 3.1 -23.6 -29.1 -19.7 1.0
  Nonresidential -2.5 -3.6 -2.9 -20.6 13.2 23.1 16.2
Public -0.4 0.9 -1.7 3.8 5.6 13.1 9.3
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