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Economy in Brief

U.S. Construction Activity Slips After Two Strong Months
by Tom Moeller July 1, 2010

Construction activity slipped 0.2% during May following revised 2.3% and 1.0% gains during the prior two months. The slip was in line with Consensus expectations for a 0.7% decline. Monthly declines in private construction were across-the-board but the annual rates of decline have slowed substantially. Nevertheless, the level of May activity remained nearly one-third below the 2006 peak. The latest figures reflect benchmark revision extending back to 2004.

Residential building activity slipped 0.4% last month led by a 6.3% decline (-57.1% y/y) in new multi-family building. Spending on improvements also slipped 0.8% (+13.3% y/y) though single-family construction activity rose 0.8% (31.2% y/y) for the twelfth consecutive monthly increase. It lifted activity by more than one-third from last year's low. Nevertheless, building remained off three-quarters from the 2006 high.

Nonresidential building activity also slipped 0.6%, reversing the April rise. Since the 2008 peak, activity has fallen by one-third. Spending on lodging fell a sharp 5.6% (-63.6% y/y) and office building dropped 2.2% (-41.9% y/y). Health-care building ticked 0.9% higher (-16.5% y/y). Spending in public sector rose 0.4% led by a 2.7% gain in spending on highways & streets (5.5% y/y).

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

Construction Put In Place (%) May April March Y/Y 2009 2008 2007
Total -0.2 2.3 1.0 -8.0 -14.9 -7.5 -1.4
Private -0.5 2.8 -0.0 -10.7 -21.9 -12.2 -5.5
  Residential -0.4 5.0 0.2 11.2 -29.9 -29.0 -19.7
  Nonresidential -0.6 0.8 -0.3 -24.8 -15.0 10.5 23.9
Public 0.4 1.6 2.9 -2.9 2.2 6.6 13.1
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