Global| Feb 01 2011U.S. Construction Spending Falls Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
Record cold temperatures kept builders off the job during December. The value of construction put-in-place plunged 2.5% following a downwardly revised 0.2% slip in November. The latest figure fell well short of expectations for a 0.1% [...]
Record cold temperatures kept builders off the job during December. The
value of construction put-in-place plunged 2.5% following a downwardly
revised 0.2% slip in November. The latest figure fell well short of
expectations for a 0.1% uptick. Residential building activity felt the
worst of the downward pressure and slumped 4.1%. Spending on improvements
posted an 8.3% decline (-6.0% y/y) while multi-family building was off
5.3% (-27.7% y/y). Single-family building curiously ticked up 0.5% (-4.3%
y/y), though not seasonally adjusted activity fell 15.1%, roughly the same
as during December 2009.
Nonresidential building slipped 0.5% after a 0.7% November uptick. Building in the transportation sector recovered 2.4% y/y. Highways & streets (+7.6% y/y) and power (13.0% y/y) remained strong. Commercial building fell 18.6% 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 5.7% y/y.
Public construction activity fell 2.8% during December adding to downwardly revised declines in earlier months. Power facilities building grew by three-quarters from last year. Also firm were sewerage & waste disposal (3.2% y/y) and highways & streets (7.5% y/y). Highway construction amounts to one-quarter of the dollars spent on public sector building. Working the other way were commercial (-19.3% y/y), office (-23.2% y/y), and educational building (-11.2% y/y) where growth was negative.
The construction put-in-place figures are available in Haver's USECON database.
| Construction Put in Place(%) | Dec | Nov | Oct | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | -2.5 | -0.2 | 1.1 | -6.4 | -10.4 | -14.9 | -7.5 |
| Private | -2.2 | 0.7 | 2.2 | -9.8 | -14.4 | -21.9 | -12.2 |
| Residential | -4.1 | 0.7 | 4.0 | -6.8 | -1.5 | -29.9 | -29 |
| Nonresidential | -0.5 | 0.7 | 0.7 | -12.3 | -23.5 | -15.0 | 10.5 |
| Public | -2.8 | -1.7 | -0.7 | -0.3 | -2.9 | 2.2 | 6.6 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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