Econoday Report: Construction Spending 1, 2006

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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 2/1/06 For Dec 2005

Construction Spending, M/M change
Actual	1.0%
Consensus	0.3%
Consensus Range	-1.0% to 1.0%
Previous	0.7 %

Highlights
Construction expenditures increased 1 percent in December, after posting healthy gains in the two previous months. Both residential and nonresidential construction expenditures accelerated during the month with residential construction rising 1 percent and nonresidential construction spending up 1.3 percent in December after an equally large 1.1 percent hike in November. Among the nonresidential categories, gains were strongest among commercial buildings and transportation. The largest hike was in power plants. Office buildings also posted good gains for two straight months. The numbers were generally stronger than expected, and this comes on the heals of weaker-than-expected GDP growth for the fourth quarter. The Commerce Department had expected a drop in nonresidential construction spending. Given the large rise for the month of December, it suggests that investment spending will be revised up in February, when fourth quarter GDP will be re-estimated.

Market Consensus Before Announcement
Construction spending inched up 0.2 percent in November after rising 0.8 percent in October. As housing construction moderates, we could see small gains in upcoming months - unless nonresidential construction spending begins to post robust gains.

Construction spending Consensus Forecast for Dec 05: 0.3 percent
Range: -1.0 to +1.0 percent

Trends

Construction spending has moderated significantly over the past year despite strenth in the housing market. Residential construction is not growing as rapidly as it did even though current levels are high. Nonresidential construction has begun to improve, but gains are still modest.

Data Source: Haver Analytics

2006 Release Schedule

Released On: 1/3 2/1 3/1 4/3 5/1 6/1 7/3 8/1 9/1 10/2 11/1 12/1

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