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 11/30/07 For Oct 2007 | ||||||||||||
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Highlights
Construction spending fell sharply in October with residential outlays leading the decline. Construction outlays dropped 0.8 percent in October, following a 0.2 percent rebound in September. The decrease for October was well below the consensus forecast for a 0.3 percent decline. October's contraction in construction spending included a dip in nonresidential outlays while public spending was up.
By sectors, private residential outlays continued to decline with a 2.0 percent drop in October, following a 1.1 percent decrease in September. Private nonresidential outlays paused in the latest month with a 0.5 percent dip after a 1.5 percent boost in September. Public outlays resumed its upward trend with a 2.1 percent jump in October, following a 0.4 percent decline the prior month.
On a year-on-year basis, overall construction outlays were down 0.6 percent in October, compared to down 0.3 percent in September.
Today's report points toward a weak fourth quarter. Not only did we get anemic consumer spending earlier in the morning with the personal income report but we also have negative numbers in the structures component of GDP. Bonds will like the numbers but equities also are likely to see the data leading to a Fed rate cut on December 11.
Construction spending rose 0.3 percent in September after posting a 0.2 percent dip in August and a 0.8 percent drop in July. September's increase in construction spending was led by healthy gains in public and private nonresidential construction. As expected, private residential outlays fell significantly. With housing starts still weak and with the supply of homes for sale still very high, another decline in residential outlays is likely for October. The question is whether nonresidential and public construction can continue their uptrend and continue to offset residential outlays' decline.
Construction spending Consensus Forecast for October 07: -0.3 percent
Range: -0.5 to -0.1 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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