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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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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 10/2/06 For Aug 2006 | ||||||||||||
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Highlights
Construction spending came in stronger than expected - but was due to a boost in government construction. Construction spending rebounded 0.3 percent in August, following a 1.0 percent drop in July. August's gain was above the consensus forecast for a 0.4 percent fall. On a year-on-year basis, overall construction outlays are up 4.4 percent in August, compared to 4.9 percent the prior month.
Most of August's gain was in public construction which posted a 1.1 percent increase, following a 1.2 percent decline the previous month. In August, private construction was mixed as residential fell while nonresidential continued to rise. Private residential construction fell 1.5 percent with single-family homes dropping 2.7 percent. Residential outlays are down 5.2 percent on a year-on-year basis, compared to 3.2 percent seen in July.
Nonresidential construction spending posted a 3.4 percent surge in August, following a 1.3 percent increase in July. Monthly nonresidential gains in August were broad-based with increases seen in lodging, office, commercial, health care, religious, amusement, communication, power, and manufacturing. The educational component was flat while the transportation component declined.
Today's report is right on track for the "standard" forecast - housing is weak while nonresidential construction continues to support the construction sector. Additionally, healthy government revenues are boosting public construction.
Construction spending fell 1.2 percent in July following a 0.4 percent gain in June. We have been seeing a divergent trend with residential outlays declining while nonresidential outlays relatively strong. We can expect residential construction outlays to continue downward as housing starts have been declining. A key issue will be whether strength continues in nonresidential construction outlays to offset some of the weakness in housing. The consensus thinks not, however, for August.
Construction spending Consensus Forecast for August 06: -0.4 percent
Range: -1.0 to +0.7 percent
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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. |
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