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 6/29/07 For May 2007 | ||||||||||||
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Highlights
Construction spending jumped 0.9 percent in May, following a 0.2 percent increase in April. The May increase was well above the market forecast for a 0.2 percent rise in construction outlays. The May boost in construction was led by private nonresidential outlays with public construction outlays also quite strong. Residential construction continued to decline.
On a year-on-year basis, overall construction outlays rose to down 2.8 percent in May from down 4.0 percent in April.
By sectors, private residential construction fell 0.8 percent in May, following a 0.4 percent decline the prior month. Private residential construction is down 17.6 percent on a year-on-year basis, compared to down 15.8 percent the prior month.
Private nonresidential outlays jumped 2.7 percent in May, following an increase of 0.9 percent in April. Private nonresidential outlays are up 18.9 percent in May on a year-on-year basis, compared to up 14.9 percent in April.
Today's report shows a strong construction sector despite weakness in housing. These numbers fall in line with economists who see a rebound in economic growth from a flat first quarter. The latest construction numbers should be a positive for equities but could nudge bond rates up. Countering that possible impact on rates is this morning's very good core PCE price index gain of only 0.1 percent for May.
Construction spending edged up 0.1 percent in April, following a 0.6 percent boost in March. While housing starts dipped 2.1 percent in May, the three prior gains in housing starts should still support construction outlays in the residential component - construction outlays reflect a lagged pattern of a number of months of starts.
Construction spending Consensus Forecast for May 07: +0.2 percent
Range: -0.3 to +2.0 percent
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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. |
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