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Economy in Brief

U.S. Construction Activity Rebounds Across-the-Board
by Tom Moeller June 1,2010

Perhaps busting out of its malaise, construction activity rebounded a sharp 2.7% during April after a 0.4% March uptick. The latest increase vastly exceeded Consensus expectations for a 0.1% uptick. The impetus for the April rise was a 2.9% jump in private sector building off the March low. Nevertheless, private sector building was off 13.5 y/y and 41.2% from the early-2006 high.

Higher residential building activity provided the impetus behind the gain in the total with a 4.4% increase. A 6.3% jump (2.7% y/y) in spending on home improvements led the April gain. It was followed by single-family construction activity which rose 3.4% rise (29.0% y/y) and was the eleventh consecutive monthly increase. It lifted activity by more than one-third from last year's low. However, building remained off three-quarters from the 2006 high. Multi-family building fell another 1.9% during April to a new series' low (-57.4% y/y).

Nonresidential building activity also recovered 1.7%, though that was the cycle's first meaningful monthly gain. Since the 2008 peak, activity has fallen by 29.0%. Higher factory sector building led the April gain with a 2.7 increase (-31.3% y/y) followed by a 1.3% rise (-15.7% y/y) in health-care building. Office building (-36.4% y/y) and educational construction (-16.6% y/y) both fell sharply. In the public sector, building activity also firmed by 2.4% (-4.4% y/y) led by a 3.6% jump in spending on highways & streets (5.1% y/y).

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

Policy Challenges for Central Banks in the Aftermath of the Crisis is last week's speech by St. Louis Fed President James Bullard and it can be found here here.

Construction Put In Place (%) April March February Y/Y 2009 2008 2007
Total 2.7 0.4 -2.4 -10.5 -12.5 -6.9 -1.6
Private 2.9 -0.5 -2.9 -13.5 -18.8 -11.1 -5.7
  Residential 4.4 0.0 -4.4 4.1 -28.0 -29.1 -19.7
  Nonresidential 1.7 -0.9 -1.7 -24.6 -11.1 13.2 23.1
Public 2.4 2.0 -1.3 -4.4 3.3 5.6 13.1
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