US construction spending unexpectedly fell by 0.2% in July to its lowest level since February 2004 as private nonresidential construction fell for the third consecutive month and public construction saw its first decline since January, the Commerce Department reported today.
Economists were expecting spending to be unchanged in the month after rising 0.3% in June, which has since been revised down to a 0.1% rise. Consistent with recent woes in the commercial real estate market, private non-residential spending fell 1.2%. Declines were seen in nearly every non-residential spending category except for religious, communication and manufacturing. Private residential spending rose 2.3% in the month, marking the largest increase for this sector since September 2008 and pushing total private construction spending up by 0.1% in July. Despite last month's gain, private residential construction spending is still down 27.8% over the last twelve months.
What isn't detailed in the article is the MASSIVE divide between public and private construction. I can't decide if this is good:
- Stimulus for the economy
- Replacing construction that would / should come from the private sector
- Unneeded construction (i.e. the private sector knows better /overcapacity as is
- Increased debt to pay for construction