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Economy in Brief

U.S. Construction Spending Increases Modestly
by Tom Moeller  January 03, 2011

Moderate weather may have played a part in its increase. Nevertheless, the value of construction put-in-place rose 0.4% during November  following an unrevised 0.7% October gain. The latest figure essentially matched Consensus expectations for a 0.2% uptick. To the upside was residential building activity which increased 0.7% in November following a 3.9% spurt during October. Higher multi-family building led the increase with a 3.0% jump but it remained off by one-third from last year. Single-family building rose a modest 0.6% (-3.0% y/y) while spending on improvements ticked up 0.4% (-3.4% y/y).

Nonresidential building slipped another -0.1% after a 0.7% October decline. The y/y decline moderated further to 16.5% as building in the transportation sector slipped just 0.4% y/y. Highways & streets (+6.8% y/y) and power (+1.4% y/y) along with other infrastructure building remained strong. Commercial building fell 15.0% y/y accompanied by a one-quarter y/y drop in office building. Hurt by lower tax revenues, educational building was off one-third from its late-2008 peak and health care building was down 6.0% y/y.

Public construction activity rose 0.7% during November and a greatly improved 4.2% y/y. Power facilities building grew by one-half from last year. Also firm were health care (11.1% y/y), sewerage & waste disposal (7.4% y/y), water supply (2.8% y/y) and highways & streets (6.9% y/y). Highway construction amounts to one-quarter of the dollars spent on public sector building. Working the other way were commercial (-15.3% y/y), office (-8.0% y/y), and educational building (-6.7% y/y) where growth was negative.

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

Underwriting on Subprime Mortgages: What Really Happened? from the Federal Reserve Bank of St. Louis can be found here.

Construction Put in Place(%) Nov Oct Sept Y/Y 2009 2008 2007
Total 0.4 0.7 1.2 -6.0 -14.9 -7.5 -1.4
Private 0.3 1.4 1.6 -11.5 -21.9 -12.2 -5.5
  Residential 0.7 3.9 1.2 -5.3 -29.9 -29.0 -19.7
  Nonresidential -0.1 -0.7 2.0 -16.5 -15.0 10.5 23.9
Public 0.7 -0.3 0.6 4.2 2.2 6.6 13.1
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