Econoday Report: Construction Spending 30, 2007

<%@ Language=VBScript %> Econoday Report: Construction Spending 30, 2007

Construction Spending

Definition
The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars. Why Investors Care

Released on 4/30/07 For Mar 2007

Construction Spending - M/M change
Actual	0.2%
Consensus	0.1%
Consensus Range	-0.5% to 0.5%
Previous	0.3 %

Highlights
Construction spending edged up in March as outlays rose 0.2 percent in March, following a 1.5 percent gain in February. The March increase was just above the market forecast for a 0.1 percent rise in construction outlays. The gain was led by nonresidential and public construction outlays. Residential construction continued to decline. Today's report shows construction following the same pattern as in recent months. Housing is still weak but due to the nonresidential and the public sectors, construction is holding up reasonably well.

On a year-on-year basis, overall construction outlays slipped to down 2.0 percent in March from down 1.2 percent in February.

Private residential construction fell 1.0 percent in March, following a 1.8 percent rebound in February. Private residential construction is down 14.4 percent on a year-on-year basis, compared to down 13.3 percent in February.

Private nonresidential outlays posted a healthy 2.4 percent increase in March following a gain of 3.0 percent in February. Private nonresidential outlays are up 16.5 percent in March on a year-on-year basis, compared to up 16.6 percent in February.

Nonresidential strength was broad-based with no major subcomponents being negative. By components nonresidential gains were seen in lodging, up 13.2 percent; office, up 0.5 percent; commercial, up 1.3 percent; health care, up 0.1 percent; religious, up 0.4 percent; amusement, up 9.4 percent; communication, up 2.1 percent; power, up 3.5 percent; manufacturing, up 1.9 percent; educational, up 0.7 percent; transportation up 1.4 percent;

Public construction increased 2.1 percent in March, following a 0.9 percent dip the prior month. March's gain was at the state level, led by educational construction. Public construction is up 9.0 percent year-on-year in March, compared to up 10.3 percent in February.

The report is not likely to have much market impact given that it is in line with expectations. However, after this morning's soft Chicago purchasing managers' report, it may have a small effect from adding to confidence that this sector is still holding up while manufacturing may be iffy.

Market Consensus Before Announcement
Construction spending rebounded in February with a 0.3 percent increase, following a 0.5 percent drop in January. As in recent months, the gain was led by nonresidential and public construction outlays. Starts have shown some recent strength due to atypically warm weather and this may boost the residential component of construction outlays temporarily.

Construction spending Consensus Forecast for March 07: +0.1 percent
Range: -0.5 to +0.5 percent

Trends

Over the last year, a decline in residential outlays has pulled down year-on-year growth for overall construction outlays. Nonresidential and public outlays are positive with nonresidential actually strong.

Data Source: Haver Analytics

2007 Release Schedule

Released On: 1/3 1/31 3/1 3/30 4/30 5/31 6/29 7/31 9/4 9/28 10/31 11/30

Released For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct