Highlights
Construction spending was unexpectedly weak in July and broad based. But there were some positive signs in the detail. Construction spending fell back 0.9 percent in July, following a 0.4 percent gain in June (originally up 0.4 percent) and 1.7 percent boost in May. Analysts projected a 0.4 percent increase for July.

The drop in July was led by private residential outlays which declined 1.6 percent after a 2.4 percent boost in June. But private residential was led down by spending on existing structures which plunged 5.5 percent, following gains of 1.4 percent in June and 4.6 percent in May. New one-family structures actually rose 1.5 percent, following a 3.1 percent boost the prior month. New multifamily structures advanced 2.8 percent after a 3.5 percent increase in June. So, the recent uptrend in housing starts was not misleading. Spending on new private residential structures continues to improve.

Turning to other sectors, private nonresidential outlays declined 0.9 percent in July, following a 0.9 percent drop in June. Public outlays decreased 0.4 percent after no change in June.

On a year-ago basis, overall construction stood posted at 9.3 percent in July, compared to 7.0 percent the month before.

Today's report appears quite negative at the headline level. And private nonresidential spending and public outlays clearly are on soft trends. But private residential spending still is on an underlying uptrend once the volatile subcomponent on spending on existing structures is excluded.

Market Consensus before announcement
Construction spending advanced 0.4 percent in June, following a 1.6 percent jump in May. The gain in June was led by private residential outlays which increased 1.3 percent after a 3.1 percent boost in May. Private nonresidential outlays edged up 0.1 percent in June, following a 1.3 percent rise in May. Public outlays were flat after a 0.5 percent boost in May.

2012 Released Schedule

Released On: 12/30 1/28 2/26 3/29 4/27 5/28 6/28 7/28 8/31 9/27 10/28 11/29 Release For: Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct