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Economy in Brief

U.S. Construction Spending Reverses Earlier Decline; 2011 Figures Are Revised Up
by Tom Moeller  September 1, 2011

To repeat last month's observation, the construction sector was not in as dire straights as previously shown, but growth still has been negligible. The value of construction spending during July fell 1.3% but that just reversed a revised June increase. Earlier figures for this year also were revised up. Consensus expectations as indicated by Action Economics were for a 0.1% rise in the July level of spending.

A lessened decline in private sector building led the overall July fall in activity. Nonresidential building slipped 0.4% (+5.7% y/y) after its upwardly revised 2.9% June gain. Residential building activity fell 1.4% and reversed its June gain as the value of improvements fell 2.9% (+21.8% y/y). Multi-family building rose 1.4% (-6.0% y/y) and single-family construction ticked up 0.1% (-8.4% y/y).

Reflecting budget shortfalls, public construction activity continued down by 2.1% (-8.8% y/y), the tenth consecutive monthly drop. Power construction fell 5.7% (+4.4% y/y) and sewerage & waste disposal fell 1.7% (-14.3% y/y). Highways & streets construction ticked up 0.5% (-3.8% y/y) but office building fell 3.4% (-14.0% 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 (%) Jul Jun May Y/Y 2010 2009 2008
Total -1.3 1.6 2.5 0.1 -11.3 -15.3 -7.5
 Private -0.9 2.0 4.2 5.5 -15.2 -22.4 -12.2
  Residential -1.4 1.1 4.5 5.3 -2.9 -29.9 -29.0
  Nonresidential -0.4 2.9 3.9 5.7 -24.0 -16.0 10.5
 Public -2.1 0.8 -0.5 -8.8 -3.9 2.1 6.6
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