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Economy in Brief

U.S. Construction Spending Falls Further
by Tom Moeller  July 1, 2011

The value of construction spending fell 0.6% during May and duplicated its downwardly revised 0.6% April drop. Though the rate of decline has slowed, activity's downtrend is in its fifth year. Figures back through 2009 were moderately revised. Consensus expectations as indicated by Action Economics called for no change in the May level.

Lower private sector building led the May decline as residential building reversed most of its April increase. Volatility in improvements has been most extreme. First off, it fell 3.8% in May (-1.0% y/y) after a 6.5% April increase. Multi-family building followed with a hard 2.1% drop (-6.8% y/y). Single-family construction also slipped 0.3% in May (-11.9% y/y) following a 0.4% April decline.

Nonresidential construction activity ticked up 0.5% in May led by a 4.5% rise (3.7% y/y) in transportation and a 4.4% increase (11.5% y/y) in power. In the factory sector building also rose 1.8% (-19.6% y/y) and in amusements it increased 1.9% (-15.8% y/y). However, building activity fell elsewhere. Educational building dropped 4.3% (-6.4% y/y) and religious construction fell 3.7% (-25.3% y/y). The value of health care building also fell 0.9% (-5.9% y/y).

Reflecting budget shortfalls, public construction activity continued down by 0.8% (-9.3% y/y), the eighth consecutive down month. Highways and streets building fell 1.5% (-11.3% y/y) and water supply fell 0.9% (-13.15 y/y).

The construction put-in-place figures are available in Haver's USECON database. The expectations figure is contained in Haver's AS1REPNA database.

Construction Put in Place (%) May Apr Mar Y/Y 2010 2009 2008
Total -0.6 -0.6 -0.2 -7.1 -11.3 -15.3 -7.5
  Private -0.4 0.4 -0.3 -5.8 -15.2 -22.4 -12.2
   Residential -2.1 2.9 -2.6 -6.6 -2.9 -29.9 -29.0
   Nonresidential 1.2 -1.8 1.9 -5.1 -24.0 -16.0 10.5
  Public -0.8 -2.4 -0.0 -9.3 -3.1 2.2 6.6
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