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Tuesday, December 1, 2009

Private Construction Slump Continues

Marketwatch details:

Spending on U.S. construction projects was flat in October and revised data now indicate that spending has not risen since April, the government reported Tuesday.

Overall, spending on construction projects barely changed in October, following a revised fall of 1.6% in September, the Commerce Department said. This was the biggest drop since January.

The revision was startling because September was previously estimated to be a gain of 0.8%. Year over year, construction spending is down by 14.4%.

One bright note was that spending on private housing projects rose 4.4% in October. This marked the largest gain in the sector since March 1998.

Not sure how good the news is that the level of private housing construction has increased in a period marked by a glut of homes for sale (the power of subsidies), but it does feed into short term GDP none-the-less.

Outside of this (non-needed?) residential construction, private construction continues to deteriorate (well, except schools). In the most recent three month period, the level of construction has decreased an amazing non-annualized 9% from already low levels.


Source: Census